Stabilizes Somewhat, But Still Sub 0.6100, Q4 CPI Out Soon

NZD/USD got to new lows in NY trade on Tuesday, the pair dipping to 0.6062 before staging a modest recovery. We track near 0.6090 in early Wednesday trade. This is the first NZD gain in 7 sessions, but only a modest one at +0.18% for Tuesday's session.

• NZD/USD is still sub all key EMAs, note the simple 200-day MA is nearby to current spot (0.6090), while the 50 day sits further south at 0.6045. Highs from Monday came in at 0.6139.
• The Kiwi marginally outperformed the other commodity currencies, which were the only ones to record gains against the USD. The broader BBDXY and DXY indices were higher on a weaker EUR backdrop (BBDXY +0.16%).
• Bear steepening across the Treasury curve prompted a firm dollar recovery. 10yr yield finished up 3bps to 4.14%, 2yr down 1.5bps to 4.376%.
• For NZD/USD we likely saw some positive spill over from positive commodity price gains, while US equity markets finished higher as well (+0.29% for the SPX).
• Coming up in around 10mins is Q4 CPI. It is forecast to show that inflation moderated to lower than the RBNZ forecast in November but due to the tradeables component. Bloomberg consensus expects headline CPI to rise 0.5% q/q and 4.7% y/y, lower than the RBNZ forecast at 0.8% q/q and 5.0% y/y and down from Q3’s 1.8% q/q and 5.6% y/y (see this link here for more details).