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FOREX: NZD Outperforms On OIS Re-Pricing, Steady Trends Elsewhere

FOREX
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The USD was under pressure at the NY/Asia Pac cross over, as headlines crossed from Bloomberg that Trump economic advisers were considering/studying a gradual tariff hike approach. This reportedly hasn't been present to incoming President Trump yet. The BBDXY opened at lows near 1314, not too far off pre NFP levels from last Friday, but we found some support and last track near 1317.1 (still off a little over 0.20%). 

  • NZD/USD has been an outperformer, rising over 0.40%, to put the pair back above 0.5605. We are still short of the 20-day EMA resistance level, which comes in around 0.5640.
  • Outside of the above BBG article, which weighed on broad USD sentiment, NZD was aided by the more positive Q4 NZIER Business Opinion Survey. Whilst the survey warned of on-going recession risks, the outlook for 2025 is on the improve. RBNZ dated OIS pricing closed 3-18bps firmer across meetings, with late 2025 leading. The expected official rate for November has firmed 30bps since Friday’s close. This has aided NZ-US yield differentials.
  • AUD/USD has risen, but lagged NZD moves, last near 0.6185, up around 0.15%.
  • Yen has lagged NZD shifts and modest AUD gains, although GBP & EUR have given up earlier gains as well. USD/JPY spiked towards 158.00 as BoJ Deputy Governor Himino spoke. However, as Himino noted that a rate would be discussed at the upcoming meeting, along with noting real yields shouldn't stay negative when deflationary forces end, USD/JPY moved off highs. The pair was last near 157.50, little changed for the session.
  • In the cross asset space, US equity futures are higher, regional equities are mostly firmer as well, led by China/HK. Japan has lagged as onshore markets return from yesterday's long weekend. US yield are down a touch.
  • Looking ahead, we have US PPI in focus, along with some central bank speak. 
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The USD was under pressure at the NY/Asia Pac cross over, as headlines crossed from Bloomberg that Trump economic advisers were considering/studying a gradual tariff hike approach. This reportedly hasn't been present to incoming President Trump yet. The BBDXY opened at lows near 1314, not too far off pre NFP levels from last Friday, but we found some support and last track near 1317.1 (still off a little over 0.20%). 

  • NZD/USD has been an outperformer, rising over 0.40%, to put the pair back above 0.5605. We are still short of the 20-day EMA resistance level, which comes in around 0.5640.
  • Outside of the above BBG article, which weighed on broad USD sentiment, NZD was aided by the more positive Q4 NZIER Business Opinion Survey. Whilst the survey warned of on-going recession risks, the outlook for 2025 is on the improve. RBNZ dated OIS pricing closed 3-18bps firmer across meetings, with late 2025 leading. The expected official rate for November has firmed 30bps since Friday’s close. This has aided NZ-US yield differentials.
  • AUD/USD has risen, but lagged NZD moves, last near 0.6185, up around 0.15%.
  • Yen has lagged NZD shifts and modest AUD gains, although GBP & EUR have given up earlier gains as well. USD/JPY spiked towards 158.00 as BoJ Deputy Governor Himino spoke. However, as Himino noted that a rate would be discussed at the upcoming meeting, along with noting real yields shouldn't stay negative when deflationary forces end, USD/JPY moved off highs. The pair was last near 157.50, little changed for the session.
  • In the cross asset space, US equity futures are higher, regional equities are mostly firmer as well, led by China/HK. Japan has lagged as onshore markets return from yesterday's long weekend. US yield are down a touch.
  • Looking ahead, we have US PPI in focus, along with some central bank speak.