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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
Whilst AUD and NZD have been volatile against the USD today, relative data outcomes continue to point in AUD's favour.
- To recap, Q1 NZ GDP was much weaker than expected, dipping 0.2%, versus market forecasts of a 0.6% rise. We noted that the detail wasn't as bad as the headline suggested, but it does continue to point to relative economic momentum in AUD's favour.
- This point was reinforced by the better than expected AU jobs data. Total jobs growth was much higher than expected (60.6k v 25k forecast) and concentrated in full-time gains. The unemployment rate was unchanged at 3.9% relative to a 3.8% dip expected, although this owes to higher participation rates.
- Not surprisingly, relative AU-NZ yield differentials are trending higher. The 10yr spread is almost back in positive territory, see the chart below.
- This points to further upside in the cross rate. We aren't too far away from earlier June highs above 1.1170.
Fig 1: Relative Data Outcomes Pushing the AU-NZ Spreads Higher
Source: MNI - Market News/Bloomberg
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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