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AUD/NZD Just Below Fresh MTD Highs

AUDNZD

The AUD/NZD cross is just off recent highs, currently tracking in the 1.0825/30 region. This is close to fresh highs for the month. A fresh break higher would see bulls target a run towards the simple 200-day MA just under 1.0900, while the 50-day MA sits back at 1.0733 (the 100-day is close by, just above 1.0800).

  • Interestingly, this latest move higher is not being sponsored by relative swap differentials. The AU-NZ 2yr spread has edged down off recent highs, see the chart below.
  • There isn't much in the way of major relative event risks until next Tuesday's RBA meeting.
  • Some support for the AUD may be coming through from a firmer metals commodity backdrop. The active Iron ore SGX contract is back above $100/ton, while copper is also showing signs of stabilizing last near $369 on a CMX basis. The earlier Caixin China manufacturing PMI beat is likely helping sentiment in this space.

Fig 1: AUD/NZD Versus AU-NZ 2yr Swap Differential

Source: MNI - Market News/Bloomberg

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