Rebalancing flows undoubtedly favoured the Kiwi, with the NZD up just 0.9% in June vs the S&P 500’s 6.5% gain, implying that investors wanting to maintain portfolio weightings would have sold US stocks and the USD. So the question is, was that a one-off flow, or can this bounce be sustained? Let’s see.

This week is another quiet one on the local data front, but with the AUD leading the Kiwi, tomorrow’s RBA meeting (we expect a hike) is key by association. We also get US Nonfarm Payrolls on Friday, a key input into the July Fed decision (we expect a +25 bps hike).