NZD/USD Hovers Around 0.6100, Business Mfg PMI Up Next

The NZD/USD rallied on the back of weaker-than-expected US CPI, the pair hit a high of 0.6135 before closing at 0.6095, up 0.21%. Focus was largely on the JPY as price actions suggest the BoJ may have intervened. Today, NZ Mfg PMI, and card spending data is due out, while focus will then turn to China's Trade Balance.

• Overnight, Supercore (services ex-housing) inflation printed negative again, at -0.05% (-0.04% prior), vs +0.27% expected, for the first back-to-back deflations since Aug-Sep 2021. Overall core services printed just +0.13%, vs +0.32% MNI avg (and 0.22% May), the lowest since August 2021. Overall, CPI fell -0.1% m/m vs 0.1% expected and CPI was 3.0% y/y vs 3.1% expected.
• The NZD/USD gapped higher on softer US CPI reaching a high of 0.6135, before largely reversing those gains to trade back of intraday highs made prior to CPI. The pair has consolidated at 0.6100 and trades between the 20 & 50-day EMAs to the upside, and the 100 & 200-day EMAs to the downside. The 14-day RSI hovers below 50 at 47.5, while the MACD is neutral.
• Immediate support is seen at 0.6083 (200-day EMA) a break would open up a move to 0.6048 (July 2 lows) and below here 0.6000 (May 14 lows). Initial resistance is at 0.6110 (20-day EMA), a break here would open a retest of the overnight lows of 0.6135, with 0.6154 (July highs) the next target.
• The NZ-US 2yr swap is 4bps lower at 10bps.
• Expiries: 0.6080 (300m), 0.6135 ($195.6m) for July 12 NY Cut, upcoming notable strikes: 0.5900 (280.51m July 17)
• Today, BusinessNZ Mfg PMI at 8:30 AEST and Card Spending at 8:45 AEST