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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
AUD/NZD has struggled to gain upside traction today, despite the record trade surplus posted by Australia. The pair is off by around 0.30% since the NY close and currently sits just above the 1.1055 level. Note this is right on the 50-day MA, which comes in at 1.1056.
- Dips below the 50-day MA have ultimately been good buying opportunities in the cross over recent months. However, dips can often extend well past this support level (-60 to -70pips) before sentiment stabilizes, as the chart below highlights.
Fig 1: AUD/NZD Versus Moving Averages
Source: MNI/Market News/Bloomberg
- Whilst recent data prints continue to suggest the macro backdrop remaining skewed in AUD's favor, yield differentials remain within multi-month ranges, see the second chart below.
- Yesterday's NZ jobs data showed clear evidence of slowing momentum, although onshore banks stressed the higher wages outcome from an RBNZ outlook standpoint. Indeed, yield spreads have edged back in NZD's favor through the current session.
- Coupled with the RBA's dovish hike from earlier in the week may keep the cross stuck within well-worn ranges for now.
- Not helping AUD's cause in recent sessions is fresh downside in commodity prices. China's property woes are weighing on iron ore, which is negating some of the positive influence from the earlier trade figures.
Fig 2: AUD/NZD & AU-NZ Government Bond Yield Spreads.
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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