NZD: NZD/USD Closes Little Changed, Remains Above 50-Day EMA

• The NZD/USD surged 1.63% to 0.5676 on Monday as the USD saw substantial weakening, as reports from the Wall Street Journal detailed that President Trump was planning to issue a broad memorandum Monday that directs federal agencies to study trade policies, but stopped short of imposing new tariffs on his first day in office. The BBDXY fell 1.10% to 1,301.67.
• The pair surged above initial resistance at 0.5634 (20-day EMA), however fell short of breaking above the yearly highs of 0.5693 (Jan 7 highs), the RSI is above 50 for the first time since early October, while the MACD is printing increasing green bars. Focus will now be on breaking the Jan 7 highs, a break here would open a move to test the 50-day EMA at 0.5734, a level we have no traded above since Oct 4. Initial support is 0.5563 (Jan 17 lows).
• New Zealand's PSI fell to 47.9 in December, marking its 10th consecutive month in contraction. All five sub-indexes, including inventories and deliveries, dropped below 50, with the sales/activity measure at 46.2. The number highlighting ongoing weak activity and suggesting downside risks to near-term growth forecasts when combined with the PMI.
• Today's expiries include; 0.5635 (NZD349.1m), 0.6050 (NZD348.2m), 0.5660 (NZD328.6m). Upcoming notable strikes: 0.5675 (NZD500.4m Jan. 23), 0.5475 (NZD450m Jan. 22)
• RBNZ dated OIS pricing cooled 1-3bps on Monday with a 84.5% chance of a 50bps cut in Feb, with 71.5bps of cumulative cuts priced by April, while the November meeting has a total of 110bps of cuts priced.
• The NZ-US 2yr swap saw a sharp reversal last week, hitting a low of -94.5bps, we last trade at -67.5bps.
• Later we have Non Resident Bond Holdings data, however focus is largely on Tomorrow's CPI data.

• Bank Indonesia to Sell 90D SVBI Bills
• Bank Indonesia to Sell 32D SVBI Bills
• Bank Indonesia to Sell 181D SVBI Bills
• Indonesia To Sell 2040 Bonds (FR0106)
• Indonesia To Sell 2030 Bonds (FR0104)
• Indonesia To Sell 2035 Bonds (FR0103)
• Indonesia To Sell 2045 Bonds (FR0107)
• Indonesia To Sell 2064 Bonds (FR0105)
• Indonesia To Sell 2054 Bonds (FR0102)
• Indonesia To Sell 350D Bills (SPN12260108)
• Indonesia To Sell 90D Bills (SPN03250423)
• Bank of Thailand to Sell 60 Billion Thb of 91-Days Bills.
• MAS to Sell S$800 Million 252-Day Bills
• MAS to Sell S$22.3 Billion 84-Day Bills
• MAS to Sell S$15.9 Billion 28-Day Bills
• Philippines To Sell PHP 30.0Bln 2034 Bonds (PH0000058133*)
• Hong Kong to Sell HK$12.6 Billion 182-Day Bills
• Hong Kong to Sell HK$62.276 Billion 91-Day Bills

USD/JPY fell from around 156.50 to the low 155.40 region as the US session unfolded on Monday. We stabilized sub 155.50, and track near 155.60/65 in early Tuesday dealings (yen up a little over 0.4% for Monday's session). Yen lagged USD weakness more broadly as both the BBDXY and DXY indices lost over 1.10%, with prospects of immediate tariff announcements from the new Trump administration fizzling out through Monday trade.

• Most USD weakness was concentrated in a short window during the US session on Monday as headlines from the Wall Street Journal crossed. The WSJ detailed that President Trump was planning to issue a broad memorandum Monday that directs federal agencies to study trade policies, but stopped short of imposing new tariffs on his first day in office. Trump officials later corroborated the reports.
• Yen notably lagged the broader positive risk on tone, although US cash Tsy and equity markets were closed for Martin Luther King day on Monday. Equity futures were higher, while Tsy futures were positive. NZD/JPY rallied back above 88.30, while AUD/JPY is now back around 97.60/65, with both pairs still comfortably sub Jan highs.
• For USD/JPY technicals, downside focus will rest with the 50-day EMA, which comes in at 154.97. The 20-day EMA is on the topside around 156.66.
• Locally today, the data calendar is empty.
• Note in the option expiry space the following for NY cut later today (as US markets return): USD/JPY: Y153.00($1.5bln), Y156.00-05($2.2bln). The sizable expiry around 156.00 may influence spot trends today.