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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 dipped back below 1.1000 before support emerged. The combination of Australia's weaker than expected wages outcome and the RBNZ's hawkish 50bps hike drove a sharp move lower. The RBNZ has a higher peak for the RBNZ track, while also noting the central bank considered a larger move at today's meeting. In contrast, market futures for the RBA September meeting dipped, although this proved to be short lived. The implied rate is back at 2.20%, so little changed on the day. Market pricing is below a 50bps move at this meeting though, given the current RBA cash rate sits at 1.85%.
- The cross has stabilized somewhat now, back above the 1.1000 handle (last 1.1020/25), while note the 100 day-MA comes in at 1.1014. We haven't spent meaningful time below this MA level since early December 2021.
- The 2yr AU-NZ swap spread is back to -60bps. We were closer to -40bps around a week ago. The current level of the cross is roughly in line with these shifts, perhaps a little more downside in the cross is a risk, see the chart below.
Fig 1: AUD/NZD & AU-NZ 2yr Swap Spread
Source: MNI/Market News/Bloomberg
- As we noted last week, the AUD/NZD cross has tended to bounce following RBNZ hikes in this policy cycle. A repeat outcome may be challenged today's outcomes, but note we have AU employment data tomorrow, so RBA expectations can still be shifted ahead of the September policy meeting.
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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