ANZ: A Well-Priced Divide

ANZ note that "AUD/NZD continues to languish close to recent lows. This is not new; the cross has struggled to find any traction for some time. What has changed in the past month, is the cross is once again moving in line with its usual fundamental drivers."

• "On a 30-day basis the cross is trading closely with both the relative rates outlook, as well as the relative path of commodities. Indeed, the divide that is growing in the outlooks of the Australian and New Zealand economies is looking increasingly well understood and priced."
• "Over the next month we think that there are modest upside risks in the cross as Australia emerges from lockdown, and the market better dimensions the macro risks permeating from China. However, for these risks to be sustained we will need to see some fundamental changes in the relative trajectory of wages growth in Australia."