NZD

• Subdued markets. US equities added to their gains, bond yields drifted a bit lower, & the USD ticked up. AUD slipped back towards ~$0.6570.• BoJ decision. No changes by the BoJ anticipated today. But there is always scope for a surprise. If it were to occur, the ‘under-valued’ JPY would lift.• NZ inflation. Q4 NZ CPI due tomorrow. Inflation slowdown set to extend. A large drop could reinforce RBNZ rate cut views, a support for AUD/NZD. It has been quiet start to the week across markets. This isn’t surprising given the lack of economic data releases and with members...

• Upbeat tone. US S&P500 closed at a record high. Base metals prices lifted. The USD drifted a little lower & the AUD clawed back a bit more ground.• Bond yields. US yields were, on net, little changed. Ahead of the blackout period a few Fed members spoke. Odds of a March rate cut below ~50%.• Event radar. Offshore, the macro focus this week will be on the BoJ, Q4 NZ CPI, the Eurozone PMIs, ECB decision, Q4 US GDP, & US PCE deflator. The relatively more upbeat mood in markets continued Friday with the tech sector inspired upswing in...

• US yields. Softer US producer prices supported views inflation pressures are receding. Expectations of multiple Fed cuts in 2024 remain. US 2yr yields fell.• Stable FX. Despite the drop in US yields the USD consolidated. AUD is hovering just under ~$0.67. The RBA outlook continues to diverge from its peers.• Event radar. Offshore the China data batch, US retail sales & comments by Fed/ECB officials will be in focus. Locally, the December jobs report is due. A quiet end to last week across FX markets with the major currencies range bound on Friday. The USD Index held its ground...

• Central banks. ECB & BoE kept rates steady but tried to push back on policy easing expectations. This helped EUR & GBP with the USD still under pressure.• Fed impacts. The US Fed’s dovish turn has continued to reverberate across markets. Bond yields fell again & risk sentiment remains positive.• AU jobs. Employment exceeded forecasts & while unemployment ticked up it remains low. China data batch due today. This can impact the AUD. Following yesterdays ‘dovish’ pivot by the US Fed and signals that rate cuts will probably be the next step, central banks remained in focus overnight. As...