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In the early New York session, the NZD/USD pair has posted a sharp decline to near 0.6130. The New Zealand dollar's performance has been turbulent in the face of negative market sentiment and intensifying concerns of a global recession.

S&P500 futures have extended their decline as investors have become more cautious in advance of the second-quarter earnings season. The primary focus will be on the banking, manufacturing, and technology sectors, as financial institutions' margins may have been impacted by tight credit conditions, manufacturing activities have contracted for seven consecutive months, and tech-savvy companies have reported weak guidance.

The US Dollar Index (DXY) has retraced to near 102.80, but the bearish bias has not yet abated. While US Treasury yields have experienced a significant decline, the price of US Treasuries has increased. The yields on 10-year US Treasury bonds have decreased to approximately 3.74 percent.

In the meantime, Federal Reserve (Fed) policymakers consistently favour future rate increases. Inflation remains double the required rate of 2%. Fed Governor Michelle Bowman concurred with Fed Chair Jerome Powell that at least two more rate increases are necessary.

Focus will remain on the preliminary US S&P PMI (June) during the American session. Investors will closely monitor the Manufacturing PMI as the sector has consistently reported contraction over the past seven months. Note that a figure below 50 indicates a contraction in activity for investors.

On the Kiwi front, the People's Bank of China's (PBOC) monetary stimulus is failing to strengthen the New Zealand Dollar. To improve China's economic outlook, the PBoC consistently pursues a dovish stance.

Notably, New Zealand is one of China's most important trading partners, and expansionary PBoC policy supports the New Zealand Dollar.

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