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Bulls Remain In Charge



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.