NZD/USD Reverses Some Late September Gains, As The Dollar Rebounds

NZD/USD mostly tracked lower post the Asia close on Monday. Levels above 0.6000 couldn't be sustained and we got sub 0.5950 by late in the NY session. We track around this level in the first part of dealing today. The Kiwi lost 0.85% for Monday's session, amid broad USD gains. NZD was around mid-range from a relative G10 standpoint. These moves leave us within recent ranges. Late September highs were near 0.6050, while recent dips sub 0.5900 have been supported.

• The USD firmed, as US yields resumed their push higher. The 10yr yield making fresh highs back to 2007 (4.68%). With the worst case scenario of the US Government avoided sentiment was aided, while the better-than-expected Manufacturing ISM also proved to be a positive factor for US yields.
• The tip in the employment subindex back above 50.0 also factoring in a stronger jobs market ahead of this Friday's nonfarm payrolls release.
• Equity sentiment was initially positive but gave way to a more cautious tone. EU equities fell, while the SPX finished around flat. Commodity indices retreated.
• The NZIER has already published the Q3 survey of business opinion. 52% of businesses surveyed expect the economy to deteriorate. This metric was 63% in Q3. 56% of firms surveyed raised prices in Q3. The expectation for Q4, is that 45% of firms will raise prices.
• Tomorrow, we have the RBNZ decision, with the central bank expected to be on hold. The tone will be in focus though given risks around a November move.