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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 is struggling to hold above the 1.1000 level (last 1.0990). The pair lost 0.34% yesterday and is now down 4.3% from late September highs. The simple 200-day MA is just above current spot levels at 1.1002 (the 200-day EMA is slightly higher at 1.1019), but we are comfortably below other simple MAs.
- NZD has seen some outperformance relative to AUD compared to AU-NZ yield momentum, although these trends may have been influenced by NZ WGBI related flows. For instance, the AU-NZ 10yr government bond yield spread is back to -45bps, compared to mid-October wides at -73bps.
- AUD/NZD versus the AU-NZ 2yr swap spread presents a less supportive picture from the AUD standpoint.
- Other drivers, such as relative data surprises and relative commodity price trends are still skewed in NZD's favor, although the cross has clearly played some catch up to the downside with these trends.
- It may take a hawkish RBA surprise to help shift momentum back in AUD's favor in the near term.
Fig 1: AUD/NZD Versus Key MA Levels
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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