AUD/NZD trades at NZ$1.0701, a touch....>

AUSSIE-KIWI: AUD/NZD trades at NZ$1.0701, a touch lower on the day and just

above its 50-DMA at NZ$1.0694. The pair has operated within a tight range,

shrugging the local data releases. New Zealand's trade deficit was narrowed than

projected, owing to a larger than forecast exports figure, while Australian

skilled vacancies printed at -0.7% M/M vs. the prior -0.4%. Likewise, AUD/NZD

looked through a speech from RBA Asst Gov Kent on the LIBOR reform.

- In hindsight, Fonterra's upward revision of their milk price forecast weighed

on the pair in yesterday's Asia-Pac hours before a period of sideways trade. The

impact may have been strengthened by earlier upgrades from Westpac & BNZ.

- This week's move has coincided with corrections to market pricing of RBNZ &

RBA action vs. the end of last week. A slight paring of RBNZ easing bets has

coincided with a very marginal uptick in exp. of a looser policy from the RBA.

- Bears look for dip below the NZ$1.0694 50-DMA, which would give them the green

light for targeting NZ$1.0666, the low of Oct 8. Bulls would like to see a jump

above the Oct 11 peak at NZ$1.0733, which would bring the Oct 17 high of

NZ$1.0793 into view.