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NZD: NZD/USD Holds Steady As Trump Trades Continue To Rally

NZD
USGlobalAPACNew ZealandBulletMarketsForeign Exchange BulletsRegionNorth America
  • NZD/USD was little changed on Monday, falling just 0.08% to 0.5962. There was little in the way of drivers overnight, the US had restricted trading due to veterans day. Trump trades have continued equities continue to trade higher, Bitcoin surged, while the USD jumped 0.50% to 1,273.87.
  • New Zealand's light traffic index rose 1.3% m/m in October, while heavy traffic increased 3%, marking its first gain in three months, according to ANZ. Despite these improvements, economic activity signals remain weak, with the light traffic trend flat and the three-month averages for both indices showing little change y/y.
  • 2yr inflation expectations rose slightly to 2.12% in Q4 from 2.03% in Q3, while 1yr expectations eased to 2.05%, and the 5yr view increased to 2.24%. Despite this, inflation remains near the midpoint of the central bank's 1-3% target range.
  • looking at technical levels, initial support remains at 0.5940 (Nov 6 lows) a break here would open a move to 0.5876 (July 26 lows). Initial resistance is 0.6014 (20-day EMA), a break here would open a move to 0.6071 (Oct 18th highs)
  • RBNZ dated OIS pricing has cooled over the past week, with 55bps of cuts priced in for November, down from a high of 59bps of cuts priced in last week, this equates to a roughly 20% chance of a 75bps cut. The Feb meeting is priced in for a cumulative total of 91bps, while further out the curve the market expects 145bps of cuts by Oct 2025.
  • The US-NZ 2yr swap rose 5bps on Monday to -32bps and now trades just off the multi-year highs of -45bps made the past week.
  • There are no major expiries for the next few sessions, November 15th session sees 0.5980 ($297m), 0.6000 ($296m), 0.6060 ($247m), 0.6100 ($196m)
  • The calendar is empty for the remainder of the day, focus will turn to Thursday's Home & Food prices
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  • NZD/USD was little changed on Monday, falling just 0.08% to 0.5962. There was little in the way of drivers overnight, the US had restricted trading due to veterans day. Trump trades have continued equities continue to trade higher, Bitcoin surged, while the USD jumped 0.50% to 1,273.87.
  • New Zealand's light traffic index rose 1.3% m/m in October, while heavy traffic increased 3%, marking its first gain in three months, according to ANZ. Despite these improvements, economic activity signals remain weak, with the light traffic trend flat and the three-month averages for both indices showing little change y/y.
  • 2yr inflation expectations rose slightly to 2.12% in Q4 from 2.03% in Q3, while 1yr expectations eased to 2.05%, and the 5yr view increased to 2.24%. Despite this, inflation remains near the midpoint of the central bank's 1-3% target range.
  • looking at technical levels, initial support remains at 0.5940 (Nov 6 lows) a break here would open a move to 0.5876 (July 26 lows). Initial resistance is 0.6014 (20-day EMA), a break here would open a move to 0.6071 (Oct 18th highs)
  • RBNZ dated OIS pricing has cooled over the past week, with 55bps of cuts priced in for November, down from a high of 59bps of cuts priced in last week, this equates to a roughly 20% chance of a 75bps cut. The Feb meeting is priced in for a cumulative total of 91bps, while further out the curve the market expects 145bps of cuts by Oct 2025.
  • The US-NZ 2yr swap rose 5bps on Monday to -32bps and now trades just off the multi-year highs of -45bps made the past week.
  • There are no major expiries for the next few sessions, November 15th session sees 0.5980 ($297m), 0.6000 ($296m), 0.6060 ($247m), 0.6100 ($196m)
  • The calendar is empty for the remainder of the day, focus will turn to Thursday's Home & Food prices