AUD/NZD shot higher in reaction to......>

AUSSIE-KIWI: AUD/NZD shot higher in reaction to Australian labour market report

for December. Unemployment rate ticked lower to 5.1% from 5.2% on the back of a

bigger than forecast jobs addition (driven exclusively by part-time jobs)

combined with a steady participation rate. As a result, ANZ scrapped a February

rate cut from their RBA call, while CBA pushed their forecast of a cash rate

reduction to Apr from Feb.

- The rate has ebbed off earlier highs, albeit holding comfortably above

NZ$1.0400. It currently sits at NZ$1.0412, +31 pips. Bulls keep an eye on

NZ$1.0452/56, which represent the channel resistance/50-DMA. A lift above there

would bring the Dec 13 high of NZ$1.0487 into play. That being said, a drop

below yesterday's low of NZ$1.0365 would give bears some reprieve.

- Aussie jobs data led to the paring of market bets for RBA easing at their

upcoming Feb 4 meeting. Implied probability of a quarter-point cut in Feb is

~27% at typing, down from yesterday's ~57%. Meanwhile, a mere ~6% chance of a

cut from the RBNZ, when they meet on Feb 12, is currently baked in.

- On the radar on Friday: NZ Q4 CPI & Dec card spending; flash Aussie CBA PMIs.