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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.
AUDNZD
AUD/NZD has added 23 pips in Asia-Pac hours Wednesday, gravitating towards a new cycle high printed yesterday at NZ$1.1065. The rate last operates at NZ$1.1049.
- AU/NZ 2-year swap spread keeps creeping higher, which resulted in a fresh multi-month high for this differential.
- The hawkish surprises in yesterday's monetary policy decision & subsequent rhetoric from the RBA signalled realisation that Australia's central bank was behind the curve when it comes to stimulus withdrawal.
- Across the Tasman, the tightening cycle is in full swing since the RBNZ's inaugural rate hike delivered back in October. While New Zealand policymakers are expected to tighten further, aggressive action has been already priced in.
- The key regional data release today, New Zealand's quarterly labour market report, failed to offer any notable insights. If anything, it provided tentative evidence that tighter RBNZ policy is working, as employment growth snapped a run of upside surprises.
- Meanwhile, the AUD blipped higher as Australian retail sales beat expectations and hit a fresh all-time high, which was testament to ongoing recovery in consumer demand.
- From a technical point of view, the key near-term topside target is provided by NZ$1.1065, which capped gains on Tuesday. A break here would shift focus to Aug 10, 2018 high of NZ$1.1176. Conversely, bears look for a pullback under May 2 low of NZ$1.0925.
Fig. 1: Australia/New Zealand 2-Year Swap Spread
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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