Free Trial
FOREX

USD Edges Lower

AUSSIE BONDS

Off Lows; Labour Data Eyed

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

AUD/NZD Pushing Higher

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

Keep reading...Show less
185 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

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

Keep reading...Show less