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NZD: NZD Falls Ahead Of RBNZ Meeting Today, Milk Prices Fall

NZD
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  • The NZD was the worst performing G10 currency on Tuesday, falling 0.54% to 0.5708, broad USD strength didn't help the currency as tsys yields rose following comments from the Feds Bowman where she warned upside inflation risks still remain, while an expected 50bps cut by the RBNZ today saw traders selling the pair.
  • Global Dairy Trade auction results showed a slight decline, with the average price for whole milk powder falling to $4,153 per ton from $4,169 a 0.2% drop. The weighted average price for all dairy products was $4,370 per ton, while the GDT price index dropped 0.6%.
  • New Zealand's REINZ House Price Index fell 0.2% m/m and 1.4% y/y in January, with the median house price dropping 1.7% y/y to NZ$750,000 (-3.8% m/m). Sales rose 18% y/y to 3,774 but fell 38% m/m, though seasonally adjusted sales increased 4.8% m/m. The median time to sell extended to 54 days, with January sales impacted by summer vacations.
  • For the time being we remain above the 50-day EMA and 0.5700 although the the RSI is ticking back down again however still above 50 at 55, while the MACD indictor is printing green bars. Key levels to watch include, resistance is 0.5763 (Dec 18 highs), while 0.5790 (100-Day EMA) becomes a target. To the downside, a break back below the 50-Day EMA at 0.5700 would open a move to 0.5673 (20-day EMA) and the Feb 12 lows of 0.5600.
  • RBNZ dated OIS is pricing in a 98% chance of a 50bps cut, another 25bps cut in April with a toss up between another 25bps cut in May/July, currently there is cumulative 113bps of cuts priced through to November.
  • RBNZ cash rate will be announced at Midday AEDT, alongside the Monetary Policy Statement, while the RBNZ Gov will speak an hour later
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  • The NZD was the worst performing G10 currency on Tuesday, falling 0.54% to 0.5708, broad USD strength didn't help the currency as tsys yields rose following comments from the Feds Bowman where she warned upside inflation risks still remain, while an expected 50bps cut by the RBNZ today saw traders selling the pair.
  • Global Dairy Trade auction results showed a slight decline, with the average price for whole milk powder falling to $4,153 per ton from $4,169 a 0.2% drop. The weighted average price for all dairy products was $4,370 per ton, while the GDT price index dropped 0.6%.
  • New Zealand's REINZ House Price Index fell 0.2% m/m and 1.4% y/y in January, with the median house price dropping 1.7% y/y to NZ$750,000 (-3.8% m/m). Sales rose 18% y/y to 3,774 but fell 38% m/m, though seasonally adjusted sales increased 4.8% m/m. The median time to sell extended to 54 days, with January sales impacted by summer vacations.
  • For the time being we remain above the 50-day EMA and 0.5700 although the the RSI is ticking back down again however still above 50 at 55, while the MACD indictor is printing green bars. Key levels to watch include, resistance is 0.5763 (Dec 18 highs), while 0.5790 (100-Day EMA) becomes a target. To the downside, a break back below the 50-Day EMA at 0.5700 would open a move to 0.5673 (20-day EMA) and the Feb 12 lows of 0.5600.
  • RBNZ dated OIS is pricing in a 98% chance of a 50bps cut, another 25bps cut in April with a toss up between another 25bps cut in May/July, currently there is cumulative 113bps of cuts priced through to November.
  • RBNZ cash rate will be announced at Midday AEDT, alongside the Monetary Policy Statement, while the RBNZ Gov will speak an hour later