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.
Note that the post-RBNZ dynamic in NZ swap rates (where the 2-Year metric has moved to the highest level since ‘16), combined with the modest post-WPI pullback in Aussie 2-Year swap rates, has allowed the AUD/NZD to move further away from its recent highs. The prospect of a higher RBNZ terminal rate, coupled with the market perhaps reconsidering its overtly hawkish view on the RBA post-WPI (particularly when we compare market pricing of tightening vs. Governor Lowe’s recent acknowledgement that he would like to see a couple more rounds of quarterly CPI data before considering a move in the cash rate) has weighed on the AU/NZ 2-Year swap rate differential, providing downward pressure for the antipodean FX cross.
Fig. 1: AUD/NZD vs. 2-Year Australia/New Zealand Swap Rate Differential (%)
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.