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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 got close to a test of the 1.0600 level in recent dealings (low of 1.0602). We are slightly higher now, last around 1.0615. NZD has continued to climb, last near 0.6115, up around 0.30% for the session (earlier highs were at 0.6122).
- The main NZD support has been the ANZ view change around the RBNZ outlook. To recap, the local bank sees hikes in Feb and Apr and the cash rate at 6% until Feb 2025.
- Market re-assessment of the RBNZ outlook, relative to the RBA, has seen a sharp move lower in the AU-NZ rate differential. The chart below plots spot AUD/NZD versus the 2yr swap spread.
- We also noted the downside risks in the AUD/NZD cross in this piece, earlier in the week.
- For AUD, RBA Governor Bullock is testifying before parliament and is largely sticking to Tuesday's script and striking a balanced tone around the outlook, see this link for more details.
- If AUD/NZD can break 1.0600, May lows from last year of 1.0560 could be the next downside target.
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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