Robertson Delivers Pre-Budget Speech, Will Oversee New Implementation Unit

Buoyant commodity markets lent support to NZD/USD Monday, amid tighter liquidity conditions caused by market holidays in China, Japan, UK & Australia's Queensland/Northern Territory. Local markets showed little reaction to an apparent slight hardening of New Zealand's stance on China. The rate returned onto the $0.7200 handle.

• NZ FinMin Robertson's pre-Budget speech grabbed attention this morning. Robertson emphasised the likelihood of continued volatility and flagged supply side issues that may affect the economy into 2022, while reiterating that the gov't aims at stabilising debt by mid-2020s. He will lead a new "Implementation Unit" within the Dept of the PM, which will "monitor and support implementation of a a small number of critical initiatives, particularly where multiple agencies are involved in the work. The Budget will be delivered on May 20.
• NZD/USD last sits at $0.7202, little changed on the day. A break above Apr 29 high of $0.7287 would clear the way to Mar 2 high of $0.7307. Bears look for a dip through Apr 30/22 lows of $0.7151/46 before taking aim at Apr 19 low of $0.7122.
• New Zealand's CoreLogic House Price Index comes out this evening. Following that, focus turns to Wednesday's Q1 labour mkt report as well as RBNZ FSR & Gov Orr's comments on the report. Thursday sees building permits & flash ANZ Business Confidence take focus, with inflation expectations coming up Friday.