MNI China Daily Summary: Friday, January 17

MNI BRIEF: UK To Delay Implementation of Basel 3.1 Until 2027

MNI: UK DEC RETAIL SALES EX-FUEL -0.6% M/M, 2.9% Y/Y

MNI BRIEF: NBS Notes Favourable Conditions For China CPI

MNI BRIEF: China's Q4 GDP Grow By 5.4%, Meeting 2024 Target

MNI: PBOC Net Injects CNY100.5 Bln via OMO Friday

MNI: US DEC INDUSTRIAL PROD +0.9%; CAP UTIL 77.6%

EZ/UK Bond Supply Calendar: EFSF Synd "Upcoming", Slov Due Mon

MNI: US DEC HOUSING STARTS 1.499M; PERMITS 1.483M

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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AUDNZD: AUD/NZD Tracking Near Upper Limits Of Recent Ranges

AUDNZD
New ZealandBulletAPACForeign Exchange BulletsAustraliaMarkets
  • The AUD/NZD is trading near the upper limits of its recent ranges, last 1.1076 with 1.1100 acting as key resistance. The cross has somewhat tracked moves in the AU-NZ 2yr swap over the past few years, and we have seen a 20bps drop over the past few sessions, now down at 41bps.
  • The cross have only briefly traded above 1.1100 once since October in the lead up to the RBNZ cutting 50bps, before quickly reversing those moves in the days post the cut.
  • RBNZ dated OIS has seen a decent cooling to start the year with the February meeting pricing dropping 8bps to 47.4bps, or 89% chance of a 50bps cut, with the market pricing in a total of 110bps of cuts through to November 2025, following 125bps of cut since July 2024 in contrast to Australia's zero cuts while the OIS market is only pricing in 68bps of cumulative cuts through to Nov 2025.
  • China's GDP & Industrial Production numbers due out tomorrow will be closely watched for any sign of a pick up in growth activity, which should have a larger impact on the AUD.
  • The next key data release for New Zealand is CPI next Wednesday while for Australia it is CPI on Jan 29th.

Chart. AUD/NZD vs AU-NZ 2yr swap

AUDNZDvs2yr
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  • The AUD/NZD is trading near the upper limits of its recent ranges, last 1.1076 with 1.1100 acting as key resistance. The cross has somewhat tracked moves in the AU-NZ 2yr swap over the past few years, and we have seen a 20bps drop over the past few sessions, now down at 41bps.
  • The cross have only briefly traded above 1.1100 once since October in the lead up to the RBNZ cutting 50bps, before quickly reversing those moves in the days post the cut.
  • RBNZ dated OIS has seen a decent cooling to start the year with the February meeting pricing dropping 8bps to 47.4bps, or 89% chance of a 50bps cut, with the market pricing in a total of 110bps of cuts through to November 2025, following 125bps of cut since July 2024 in contrast to Australia's zero cuts while the OIS market is only pricing in 68bps of cumulative cuts through to Nov 2025.
  • China's GDP & Industrial Production numbers due out tomorrow will be closely watched for any sign of a pick up in growth activity, which should have a larger impact on the AUD.
  • The next key data release for New Zealand is CPI next Wednesday while for Australia it is CPI on Jan 29th.

Chart. AUD/NZD vs AU-NZ 2yr swap

AUDNZDvs2yr