USD Gains Continue, NZD Falters Post Survey Data

The USD has spent the first part of Tuesday trade on the front foot, the BBDXY USD index firming back above 1272.0, although short of late June highs.

• Carry over USD strength from Monday's US session has been evident. US yields are lower, but losses of around 2bps are only giving up part of Monday's gain. US equity futures are lower, off 0.2-0.3%.
• NZD and AUD have faltered, although sit slightly up from session lows. NZD/USD got too fresh multi week lows of 0.6048 (last near 0.6055), around 0.30% weaker against the USD.
• Earlier NZ business sentiment data pointed to softer business conditions and easing inflation pressures. The NZ-US 2yr swap spread has rolled over modestly, back to +24.5bps, versus recent highs near +35bps. NZ OIS was also slightly weaker ahead of next week's RBNZ meeting.
• AUD/USD is back close to 0.6645, off 0.25%. The RBA minutes came and went, without shifting the sentiment needle.
• USD/JPY sits higher, last above 161.60, but hasn't been able to breach Monday intra-session highs at this stage (161.73). Verbal FX rhetoric has continued.
• Looking ahead, the Fed’s Goolsbee appears and Fed’s Powell, ECB’s Lagarde and BCB’s Campos Neto speak in Sintra. Also, the ECB’s Schnabel, de Guindos and Elderson talk. In terms of data, there are May US JOLTS job openings and preliminary June euro area CPI.