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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 sits slightly off session lows, last around 1.0630/35. We got close to 1.0620 earlier post the RBNZ's surprise +50bps hike. The chart below points to further downside risks for the cross from a near term standpoint. The AU-NZ 2yr swap spread is at fresh wides -168bps, yet the AUD/NZD is still above lows that prevailed from late 2022.
- Markets are generally expecting a further +25bps from the RBNZ at the next policy meeting, while the RBA is more data dependent, with RBA Governor Lowe stating this isn't necessarily the end of the tightening cycle, but further moves look to be very much data dependent.
- The technical backdrop remains skewed to the downside for the AUD/NZD cross, with the 2022 low at 1.0471 a likely focus point.
- We likely need to see noticeably improvement in the AU terms of trade backdrop to turn the tide more positive for the A$.
- On the upside, bulls first look to sustain a break of the 20-Day EMA (1.0746) to target the 200-Day EMA (1.0880).
Fig 1: AUD/NZD Versus AU-NZ 2yr 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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