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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
The AUD/NZD cross sits just below fresh cyclical highs, last at 1.1245/50. The pair has had a number of attempts to break above 1.1255/60 in recent weeks but hasn't been able to do so. Dips sub 1.1200 have been supported this week, with underlying flow momentum still seemingly skewed in AUD's favour.
- Today's data, at face value, was better from an NZD standpoint, following the comfortable Q2 GDP beat. Australian jobs data was more mixed, with a slight uptick in the unemployment rate.
- Still, several local banks have stated today's data is a hawkish read for the RBA outlook. This is reflected in higher short end yields. The 2yr bond is up close to 6bps for the session, last at 3.07%.
- This has pushed the AU-NZ 2yr spread marginally back in AUD's favor, see the chart below, although a wedge remains.
- Today's outcomes should bias relative data surprise indices lower. We wrote earlier in the week about the current cyclical backdrop being less favourable for the cross (see this link for more details).
- Tomorrow, RBA Governor Lowe appears at a parliamentary testimony, while in NZ the manufacturing PMI is out.
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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