Risk Aversion Clips Kiwi's Wings

Initial enthusiasm surrounding potential for a Biden/Putin summit evaporated later on Monday, as Russia moved to recognise the separatist Luhansk & Donetsk People's Republics in eastern Ukraine, ratcheting up tensions in the region and inspiring a flight to safety. New Zealand's domestic headline flow took the back seat, with NZD/USD retreating into the close. The rate has extended losses in early Asia-Pac trade, as the fallout from Russia's decision continues to undermine risk appetite.

• Note that NZ FinMin Robertson said that moving to Phase 3 of the red-light response to the Omicron outbreak is "not far away at all."
• NZD/USD trades -10 pips at $0.6690 at typing, with bears looking for a dip through Feb 14/4 lows of $0.6593/90 towards Jan 28 low of $0.6530. Conversely, a jump above yesterday's high of $0.6734 would shift focus to Jan 19 high of $0.6812.
• The RBNZ will deliver their monetary policy decision on Wednesday and are widely expected to resume OCR hikes. Some are pointing to a possibility of a 50bp rate rise, although market pricing implies only a ~22% chance of such a move.
• Domestic data highlights include credit card spending (today) as well as retail sales & trade balance (Friday).