Robertson Defends Public Sector Pay Freeze, China Lashes Out At NZ

NZD/USD recouped losses Thursday after it had taken a hit from headlines re: Sino-Aussie trade tensions, which had caught some participants off guard. The rate returned into positive territory in U.S. hours as the greenback struggled to regain poise.

• FinMin Robertson defended his decision to implement a pay freeze for high-earning public servants. He denied interest.co.nz's labelling of the move as a "contractionary" policy and argued that it will help reduce inequality.
• China reacted to New Zealand's growing assertiveness re: human rights issues after MPs passed a motion recognising "severe human rights abuses" against the Uyghur community in Xinjiang, although the word "genocide" was dropped from the ACT-sponsored text before it was backed by PM Ardern's Labour Party. Beijing condemned what it deemed to "run counter to international law and basic norms governing international relations."
• It came as no surprise that NZ paused quarantine-free travel arrangement with Australia's NSW for 48 hours yesterday, pending the results of a probe into two new Covid-19 cases in Sydney.
• 2-year inflation expectation headlines the local docket today. Next week's highlights include card spending data (Tuesday), food price index (Thursday) & BusinessNZ M'fing PMI (Friday).
• NZD/USD trade at $0.7232 at typing, little changed on the day & poised to record a weekly gain. A clearance of Apr 29 high of $0.7287 would shift focus to Mar 2 high of $0.7307. Conversely, a dip through May 4 low of $0.7116 would open up the $0.7100 figure.