AUD/NZD has faded after Westpac.........>

AUSSIE-KIWI: AUD/NZD has faded after Westpac revised their RBA call to two more

rate cuts next year, which will bring the cash rate to 0.25% in June, with QE to

follow in the second half of 2020. The pair operates at its worst levels in

three months, last -15 pips on the day at NZ$1.0545.

- To put it in context, RBA Governor Lowe said yesterday that Australia's

central bank might turn to QE if the cash rate falls to 0.25%. He insisted that

such a scenario is unlikely to unfold in the near future.

- A break below the tentative trendline support at NZ$1.0531 would signal that

bears are firmly in charge, perhaps ready to challenge the Aug 26 low of

NZ$1.0522. Meanwhile, a recovery of the 200-DMA at NZ$1.0572 would bring bulls

some reprieve, returning the focus to the NZ$1.0600 mark.

- As a reminder, the RBA will deliver its last monetary policy decision of this

year next Tuesday. Lowe et al. are expected to leave the cash rate unchanged.

Markets price in a modest ~14% probability of a cut, down from the 21% at the

start of the week. On the other side of the Tasman, the RBNZ doesn't meet until

Feb & the current mkt pricing points to a ~31% probability of an OCR reduction.