CURRENCY: Expect the NZD to remain fairly well bid, but to "chop some wood" through key resistance at around 0.8250. High interest rates and good demand for bonds at the weekly tenders should keep the Kiwi well supported.

RATES: After a very quiet Friday night rates are likely to open unchanged.

REVIEW

CURRENCY: Kiwi traded steadily higher in London as the USD came under pressure, but struggled into key resistance at 0.8250. We open the week near highs for the year.

GLOBAL MARKETS: A relatively quiet end to the week in markets. Equities started well on more headlines that a Greek deal was close, but lost steam on a mildly disappointing US GDP result. US Treasury yields fell, with 5 year yields down to their lowest level ever, as markets continued to digest the dovish FOMC meeting. Peripheral spreads were mixed, with Italian 10yr performing strongly but Greece and Portugal pushing wider. Commodities were mixed, with gold down but oil up slightly.

KEY THEMES AND VIEWS

GREECE DEAL (STILL) 'NEAR'. More headlines on Friday night that a deal on restructuring Greek sovereign debt was a matter of days away, with reports that private sector participants were close to accepting a coupon of well under 4 percent on the new bonds. Whatever the details, a successful deal is largely priced in, and failure would be quite a shock to markets. Meanwhile, Fitch followed through on their month-old threat and cut credit ratings on Italy, Spain and three other euro-area countries. Also, IMF head Christine Lagarde said they were "not terribly positive about what has been done" in terms of Greece's structural reforms thus far, and European policymakers are reportedly discussing requiring the right to directly intervene in Greek budget decisions in exchange for further bailout funds. Now the politics are getting interesting.

US GDP MILDLY DISAPPOINTS. The advance Q4 US GDP figures were slightly below expectations, though the headline result of +2.8 percent annualised quarterly growth was the strongest pace since 2010 Q2. But inventories accounted for 1.9ppts of the overall increase, and personal consumption growth was subdued at +2 percent q/q annualised. Fiscal consolidation is also weighing, with a 4.6 percent fall in government consumption (led by defence) seeing the public sector subtract 0.9ppts from growth. On the plus side, the tentative recovery in the housing sector saw private residential investment rise 10.9 percent q/q annualised. Business investment also made a reasonable contribution to growth. While the GDP price deflator rose just 0.4 percent (exp: +1.9 percent), the core PCE deflator was up 1.1 percent (exp: 0.9 percent).

OTHER EVENTS AND QUOTES

� University of Michigan consumer confidence in January was revised upward slightly to 75 from a preliminary print of 74. This is the series' highest level since May 2011.

� Euro M3 money supply growth dropped sharply in December to 1 percent from 2 percent the previous month. This matters as the ECB considers it a good lead indicator for inflation.

� "PSI stands for private sector involvement; ECB is not private." The ECB's Asmussen explains why the ECB won't also be taking a haircut.

NZDUSD: Flying

Whether the Kiwi can break through resistance around 0.8250 remains to be seen, but it has been extremely well supported over the past few sessions, and RBNZ Governor Bollard's reiteration on Friday that NZ is well placed to weather a global shock will keep the Kiwi well bid.

Expected range: 0.8200 - 0.8270

NZDAUD: All eyes on next week

Next week's RBA meeting is the key risk event for this cross. With less than a full cut priced in, expect the market to move whatever the outcome. Until then, expect the cross to largely mirror the NZDUSD, with a bias to the upside given expectations the RBA will indeed cut.

Expected range: 0.7695 - 0.7800

NZDEUR: Vulnerable

Positive newsflow in relation to Greek negotiations has seen the EUR rebound, and while that tends to be good for the NZD, it's negative for this cross, which came within a whisker of its all-time high overnight.

Expected range: 0.6200 - 0.6290

NZDJPY: Drifting

This cross has gone the way of the NZDEUR. With USDJPY on the rebound, having surged to 78.28 late last week, expect a test of key support around 76.65 on the USDJPY to limit downside on NZDJPY, especially with the NZD still well supported.

Expected range: 62.80 - 63.80

NZDGBP: Cresting

Kiwi sterling has come off highs, but is likely to track in line with NZDUSD ahead of next week's Bank of England meeting.

Expected range: 0.5220 - 0.5260