NZD: NZD Slumps 1%, But NZD/JPY Threatening Multi Month Break Higher

NZD/USD tracks near 0.5940 in early Thursday Asia Pac dealing. We lost around 1.1% for Wednesday's session, amid broad USD gains, as markets moved back into Trump related trades. NZD wasn't the worst performer in the G10, with yen off around 1.9%, EUR down 1.8%. Intra-session lows from Wednesday trade for NZD/USD came in at 0.5912, fresh lows back to early August for the pair. 

• Broader USD indices rose, the BBDXY up 1.3% to 1.270, although we sit off intra session highs (1275.53 from Wednesday). The US Tsy curve bear steepened, the 10yr yield up around 16bps to 4.43% at the time of writing, with Trump's policies expected to be reflationary.
• Fed easing expectations were pared for 2025, but a 25bps cut is still expected later at the FOMC meeting.
• US equity markets surged, with the SPX up 2.53%, its best session since Nov 2022. It closed at a fresh record high. This likely helped higher beta plays outperform JPY etc at the margins.
• NZD/JPY got close to 92.00 but couldn't break higher, the pair last near 91.75/80. The pair has spent little time above 92.00 since July of this year.
• For NZD/USD focus is likely to remain on downside risks, early August lows rest at 0.5850. The 20-day EMA is near 0.6025.
• The local data calendar is empty until next week's 2yr inflation expectations print. 

Fig 1: NZD/JPY Versus Key EMAs