Trade Balance On Tap, China Covid Concerns & Fedspeak Boost Greenback

NZD/USD prints $0.6101, the pair was down ~0.8% in Monday's session.

• Additional Covid deaths in China, amid a spike in cases sparked fears of tougher restrictions, and further hawkish Fedspeak underpinned USD strength yesterday with DXY up ~0.8%. Kiwi was offered through the London and New York sessions before finding support at $0.6090. NZD recovered to current levels in late NY dealing.
• US equities fell, the S&P500 down ~0.4%. Crude futures pared losses after Saudi Arabia denied a report it was discussing an oil production increase for the OPEC+ meeting next month.
• OIS markets are pricing ~69 bps hike in the OCR at tomorrows RBNZ meeting an increase of 4bps from the end of last week. The terminal rate is now priced to peak at 5.17%.
• Technically, bulls look to target the 200-day EMA at $0.6237. A break through there would open the way to the high from 12 Aug at $0.6468. Bears need to breach the 100-day EMA at $0.6025 to re-establish the downtrend.
• On the wires shortly we have October Trade Balance, the prior reading was a deficit of ~NZ$1.6bn.