New Zealand lockdown amplifies the more dour risk mood

European indices are sitting in the red to start the day, with US futures marked lower as well as delta variant concerns continue to make headway this week.

The latest victim being New Zealand, as the country enters into a fresh Level 4 lockdown for three days (Auckland to be in lockdown for seven days).

The dollar, yen, and franc are leading gains in the major currencies space with commodity currencies lagging in particular. NZD/USD is now dragged down by 1.6% to 0.6905 and is close to testing the support region from the July lows @ 0.6880-00.

Meanwhile, 10-year Treasury yields are also down 3.5 bps to 1.222% and that is reaffirming safety flows as we get things going on the session.


US retail sales later in the day will be a key risk event to watch. Given present circumstances, a strong report could ease some of the sour tones in the market but a poor report could be a trigger for a massive wave of risk aversion this week.