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NZD Outperformance Continues On Data & Higher US Equity Futures

FOREX

The BBDXY sits slightly lower for the first part of Thursday trade, the BBDXY index last under 1250. NZD has been the outperformer aided by better data and a firmer US equity futures backdrop.

  • NZD/USD is back around 0.6120, up close to 0.40% for the session. This is still sub post RBNZ highs, but is maintaining the Kiwi outperformance theme.
  • Retail sales for Q1 rose +0.5%, against a consensus expectation for a fall. The broader consumer spending backdrop remains soft though. RBNZ Governor Orr stated the central bank doesn’t want to risk a blowout in inflation expectations, although appeared to leave a high bar for a further hike.
  • AUD/NZD is down 0.25% at 1.0830/35, close to the 200-day EMA support point. AUD/USD is higher, but trailing NZD, the pair last near 0.6630. Consumer inflation expectations eased to 4.1% in April from 4.6%.
  • Risk sentiment has been aided by a positive US equity futures backdrop. Nasdaq futures are up nearly 1% (Eminis +0.60%), with Nvidia's strong earnings result from late Wednesday US time, a clear positive. This is helping to offset a more mixed regional equity tone, with China/HK markets tracking lower. US yields sit a touch higher.
  • USD/JPY got to fresh highs of 156.90, but now sits back in the 156.70/75, little changed for the session. BoJ bond buying ops were unchanged, while the preliminary manufacturing PMI for May moved back into expansion territory.
  • Looking ahead, preliminary PMIs in the UK and EU are out, as well as the US. The Fed's Bostic also speaks.

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