RBNZ's MPS Takes Centre Stage

NZD/USD ground higher Tuesday, as the greenback struggled for any topside momentum amid continued assessment of recent Fedspeak regarding U.S. inflation outlook. The rate neared one-week highs, before trimming gains into the WMR fix.

• Several prominent NZ epidemiologists warned that Aoteaora is "highly vulnerable to a large outbreak" of Covid-19, pointing to the experience of Taiwan and Singapore, which witness a resurgence in new cases despite earlier being seen as success stories.
• New Zealand's trade balance for the month of April comes out later today. Looking further afield, ANZ Consumer Confidence will be published on Friday.
• The RBNZ are set to deliver their monetary policy decision & unveil the latest economic forecasts today (our usual preview is available here).
• Short-end implied NZD/USD volatilities have edged higher in the lead-up to the RBNZ decision. Overnight vol sits +0.53 at 13.78% after printing a two-month high of 15.28% yesterday, while 1-week tenor sits +0.15 at 8.86%.
• Spot NZD/USD trades at $0.7226, just shy of neutral levels. A retreat under May 19 low of $0.7152 would open up the 50-DMA/May 13 low at $0.7142/35. Conversely, a rally above May 18 high of $0.7271 would bring May 10/Mar 2 highs of $0.7305/07 into play.