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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUDNZD
The AUD/NZD cross is threatening to break back above the 1.1000 handle. Relative data outcomes have moved in favor of the cross today.
- The ANZ business activity and business confidence prints showed further deterioration in May. Activity (-4.7) is back to lows last seen in 2020, while confidence (-55.6) is getting close to 2020 lows.
- Relative business conditions generally correlate well with the AUD/NZD cross, see the first chart below. Relative business conditions are measured by the NAB business conditions measure for Australia less the ANZ business activity measure for NZ.
- The latest reading assumes no change in the NAB conditions index, which last printed at +20 for April. We could see some pullback in May (which is due to print in the middle of June), however, the differential remains firmly in favor of the AUD at this stage (nearly +25 points).
Fig 1: AUD/NZD Cross Rate & Relative Business Conditions
Source: MNI - Market News/Bloomberg
- The China PMI prints were firmer than expected as well, which should also aid the AUD more at the margin. Iron ore prices are drifting higher to $137.5/tonne.
- Finally, Australian Q1 partials were a mixed bag, with a bigger than expected drag from net exports (-1.7ppts) but inventories and company profits better than expected. Building approvals were weaker, but credit firmer.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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