NZD: NZD/USD Edges Higher, Testing 20-Day EMA

• NZD/USD fell 0.77% to 0.5557 on Friday, as the USD rallied and hit highest level since Nov. 2022 after the December US jobs report exceeded estimates by a wide margin, with 256,000 jobs added and a 4.1% unemployment rate. All G-10 peers fell against the greenback, with the NZD falling to it's lowest levels since Oct 2022.
• New Zealand's Building approvals jumped 5.3% m/m in November, from a 5.2% decline the month prior, while filled jobs rose 0.30% from a revised -0.2% the month prior
• Technical indicators suggest bearish momentum, with the pair at risk of testing the 13-year low of 0.5470 if it breaks below 0.5500. Initial support is 0.5543 (Jan 10 lows), while to the upside a break above 0.5642 (20-day EMA) before any sort of momentum change can occur.
• The NZ-US 2yr swap fell 10bps on Friday, hitting a new low of -95.5bps, before closing at -94bps. We now trade just off the all time lows off -100bps
• RBNZ dated OIS is pricing in 49bps of cuts at the Feb meeting, and a further 25bps of cut in April, while there is 133bps of cumulative cuts priced in by Oct 2025
• No large nearby strikes Monday, with notable upcoming strikes: 0.5875 (NZD606m Jan. 15), 0.5885 (NZD453.7m Jan. 16), 0.6075 (NZD425.8m Jan. 15)
• There is little else on the calendar today and a slow week is to following with just Food prices on Thursday and BusinessNZ Mfg PMI on Friday

AUD/USD got to fresh cycle lows of 0.6140 on Friday in the aftermath of the stronger than expected US NFP data. We track slightly higher in early Monday dealings, last near 0.6150, after losing 0.80% for Friday's session to be among the worst G10 performers. Only JPY rose against the USD for Friday's session. The USD BBDXY index got to fresh highs above 1320. 

• For AUD/USD technicals, the bears remain in control. Round figure support at 0.6100 will be eyed, while 0.6045 and 0.5994 are projections level of the Sep 30 - Nov 6 - 7 price swing. Initial firm resistance to monitor is 0.6257, 20-day EMA. The 50-day EMA is at 0.6374. The pair was last sub 0.6000 during the onset of the Covid pandemic in 2020, we saw lows of 0.5510 before support emerged.
• US yields were stronger across the board post the US NFP beat, the 10yr rising to 4.76%, the 2yr 4.38%, in terms of Tsy yields. Fed rate cut expectations were also tempered further.
• The US real 10yr yield rose to 2.34%, fresh highs back to 2023, and was a headwind for US equity market sentiment. The SPX fell 1.54%. AUD/JPY fell sub 97.00, but tracks just above 97.00 in early Monday dealings, still within recent ranges back to Dec last year.
• The aggregate commodity index rose 2.04% per BBG (aided by oil after fresh US oil sanctions on Russia boosted crude), the base metals up nearly 0.80%, but this didn't help the A$ too much.
• Today on the data front we have the Melbourne Institute Inflation gauge and ANZ job adverts. On Thursday we get Dec jobs data.