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AUD/NZD Rallies On Hawkish RBA & Strong Equity Markets

NZD
  • The AUD/NZD rallied on Thursday post hawkish comments from RBZ Gov, who reiterated that they considered raising rates this week while higher equity prices also help the AUD. The cross closed 0.83% higher at 1.0962 and now trades 0.30% higher for the week.
  • Looking at techs, initial support is 1.0928 (100-day EMA), with 1.0880 (200-day EMA) the next support, while we tested the 50-day EMA at 1.0975 earlier a break above here would open a move back to 1.1000.
  • RBA dated OIS is now pricing in a 12% chance of a cut at the September, this is l5bps softer than Thursday and looking into year-end the market is pricing in 23bps.
  • The AU-NZ 2yr swap spread was 10bps higher on Thursday and now sits at -10bps
  • Expiries: 1.103 ($290m), 1.0930 ($530.65m) Aug 9 NY cut
  • Today the data calendar is empty with just a 2027 bond auction to come.

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