NZ Retail Sales Shrink More Than Forecast, RBNZ MonPol Decision Approaches

NZD/USD ground higher Monday as the kiwi received a boost after S&P upgraded New Zealand's sovereign credit rating, while BBG Commodity Index remained on the roll. The pair faded its initial upswing into the London morning, but resumed gains later in European hours, rallying to three-year highs.

• New Zealand declared one new Covid-19 case in the community this morning, it was linked to a previously identified case. This comes after the gov't decided to lower the alert level in Auckland to 1 from 2.
• The Q4 decline in NZ retail sales was steeper than forecast, as they fell 2.7% Q/Q vs. forecast of a 0.5% dip.
• NZD/USD trades at $0.7326, just shy of neutral levels. Bulls look for a resumption of gains above Feb 22 high of $0.7343, which would expose $0.7395, where the rate peaked on Apr 13, 2018. On the downside, initial focus falls on the 50-DMA at $0.7189, followed by trendline support at $0.7172.
• The RBNZ delivers its first MonPol decision of 2021 tomorrow and virtually all analysts expect the MPC to stand pat. Gov Orr will shed some light on the Reserve Bank's thinking when he speaks on Wednesday, Thursday and Friday.
• Worth adding that Orr will deliver a speech on "The Future of Monetary Policy" at a conference hosted by Waikato University next week. Other speakers include FinMin Robertson, Infrastructure Commission Chair Bollard, ex-PM English and RBNZ Chair Quigley.
• On the data front, focus moves to final ANZ Business Confidence (Thursday) as well as ANZ Consumer Confidence & trade balance (Friday).