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AUSSIE SWAPS
The previously flagged hawkish RBNZ repricing in the wake of the latest NZ labour market data has added fresh tightening pressure to the Australia/New Zealand 2-Year swap spread, resulting in yet another multi-year low for that differential.
- The differences between the short-term path of RBA & RBNZ policy is becoming more pronounced even after the RBA's decision to stick with its tapering plans.
- A reminder that all of the "big 4" New Zealand Banks now look for 3x 25bp hikes from the RBNZ during the remainder of '21. That equates to a 25bp hike at each of the remining 3 meetings. The OIS strip currently prices ~67bp of tightening over the same horizon.
Fig. 1: Australia/New Zealand 2-Year Swap Spread (%)
Source: Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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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