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NZD: NZD/USD Surges On Trump Tariff News, Breaks Above 20-Day EMA

NZD
USNew ZealandNorth AmericaBulletAPACForeign Exchange BulletsMarkets
  • The NZD/USD surged 1.63% to 0.5676 on Monday as the USD saw substantial weakening, as reports from the Wall Street Journal detailed that President Trump was planning to issue a broad memorandum Monday that directs federal agencies to study trade policies, but stopped short of imposing new tariffs on his first day in office. The BBDXY fell 1.10% to 1,301.67.
  • The pair surged above initial resistance at 0.5634 (20-day EMA), however fell short of breaking above the yearly highs of 0.5693 (Jan 7 highs), the RSI is above 50 for the first time since early October, while the MACD is printing increasing green bars. Focus will now be on breaking the Jan 7 highs, a break here would open a move to test the 50-day EMA at 0.5734, a level we have no traded above since Oct 4. Initial support is 0.5563 (Jan 17 lows).
  • New Zealand's PSI fell to 47.9 in December, marking its 10th consecutive month in contraction. All five sub-indexes, including inventories and deliveries, dropped below 50, with the sales/activity measure at 46.2. The number highlighting ongoing weak activity and suggesting downside risks to near-term growth forecasts when combined with the PMI.
  • Today's expiries include; 0.5635 (NZD349.1m), 0.6050 (NZD348.2m), 0.5660 (NZD328.6m). Upcoming notable strikes: 0.5675 (NZD500.4m Jan. 23), 0.5475 (NZD450m Jan. 22)
  • RBNZ dated OIS pricing cooled 1-3bps on Monday with a 84.5% chance of a 50bps cut in Feb, with 71.5bps of cumulative cuts priced by April, while the November meeting has a total of 110bps of cuts priced.
  • The NZ-US 2yr swap saw a sharp reversal last week, hitting a low of -94.5bps, we last trade at -67.5bps.
  • Later we have Non Resident Bond Holdings data, however focus is largely on Tomorrow's CPI data.
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  • The NZD/USD surged 1.63% to 0.5676 on Monday as the USD saw substantial weakening, as reports from the Wall Street Journal detailed that President Trump was planning to issue a broad memorandum Monday that directs federal agencies to study trade policies, but stopped short of imposing new tariffs on his first day in office. The BBDXY fell 1.10% to 1,301.67.
  • The pair surged above initial resistance at 0.5634 (20-day EMA), however fell short of breaking above the yearly highs of 0.5693 (Jan 7 highs), the RSI is above 50 for the first time since early October, while the MACD is printing increasing green bars. Focus will now be on breaking the Jan 7 highs, a break here would open a move to test the 50-day EMA at 0.5734, a level we have no traded above since Oct 4. Initial support is 0.5563 (Jan 17 lows).
  • New Zealand's PSI fell to 47.9 in December, marking its 10th consecutive month in contraction. All five sub-indexes, including inventories and deliveries, dropped below 50, with the sales/activity measure at 46.2. The number highlighting ongoing weak activity and suggesting downside risks to near-term growth forecasts when combined with the PMI.
  • Today's expiries include; 0.5635 (NZD349.1m), 0.6050 (NZD348.2m), 0.5660 (NZD328.6m). Upcoming notable strikes: 0.5675 (NZD500.4m Jan. 23), 0.5475 (NZD450m Jan. 22)
  • RBNZ dated OIS pricing cooled 1-3bps on Monday with a 84.5% chance of a 50bps cut in Feb, with 71.5bps of cumulative cuts priced by April, while the November meeting has a total of 110bps of cuts priced.
  • The NZ-US 2yr swap saw a sharp reversal last week, hitting a low of -94.5bps, we last trade at -67.5bps.
  • Later we have Non Resident Bond Holdings data, however focus is largely on Tomorrow's CPI data.