NZD

• Rates reprice. Stronger than expected US & European data jolted bond yields higher. US 2yr yield spiked to a cyclical high before settling near ~5%.• AUD struggles. AUD remains on the backfoot. Higher rates for longer is a negative for global growth. Policy expectations are also against the AUD.• US payrolls. US non-farm payrolls data released tonight. Another solid report could reinforce the upswing in global interest rate pricing. A case of good economic news is bad news for markets overnight. Robust data jolted markets into re-evaluating how high interest rates may need to go to take the heat...

• Policy divergence. JPY continues to weaken with the BoJ’s stance continuing to diverge from the rest of the world. AUD near a multi-month high.• Fed talk. Chair Powell testifies to Congress this week. Markets still aren’t pricing in the Fed’s views. A shift up could give the USD some support.• China stimulus. More stimulus to support the faltering recovery is anticipated, but we think China may not meet the markets seemingly lofty thinking. US markets had a relatively quiet end to a busy week on Friday. US equities retreated from their 14-month highs (S&P500 -0.4%), while bond yields increased...