ANZ: Safe-Have Demand Offsets Carry Allure On Thursday

ANZ write “the NZD was unable to sustain yesterday’s post-RBNZ bounce, and starts the day back near $0.63, having hit a high just shy of $0.6380 yesterday. But it isn’t something local that pulled it back, with AUD and EUR also lower; rather it was a rebound in the USD and likely safe-haven buying going into the long weekend. We say that because U.S. bond yields slumped further and data there slowed, but the DXY still bounced. Local recession fears have lifted following the RBNZ’s 50-pointer yesterday, but equally, stern action should stem any lingering inflation concerns. That’s a less straightforward picture for the NZD, but carry is back, and NZ now has the highest G10 cash rate once more.”