Back Close To 0.5900, NZ-US 2yr Swap Spreads At Multi Month Lows

NZD/USD drifted lower post the Asia close on Wednesday. From highs around 0.5940 we slipped close to 0.5900 late in NY. We sit slightly higher in early Thursday dealings, last in the 0.5910/15 region. The Kiwi lost 0.40% for the session, the third worst performer in the G10 space (behind AUD and JPY), amid mixed USD trends (BBDXY +0.09%).

• NZD is sub its 50-day EMA (near 0.5930), while the 20-day sits back near 0.5900, so not far away from current spot levels.
• A further pull back in back end US yields (10yr to 4.50%, -7bps) didn't aid NZD much, although the front end was steadier and NZ-US 2yr swap rate differentials are at multi month lows, near +40bps. Yesterday's RBNZ inflation expectations data points to a further easing in NZ inflation pressures.
• Equity sentiment was slightly better in EU markets, while US markets managed a small gain (SPX +0.10%).
• Lower oil prices were another feature, with concerns this is reflecting a waning global demand outlook, which also likely impacted NZD negatively.
• The local data calendar is empty today. Earlier the 3 month budget deficit to end Sep was narrower than forecast at NZ$2.5bn (NZ$223mn better than expected). BNZ also noted Oct job ads fell 5.6% m/m (BBG).