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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUDNZD
AUD/NZD has broken out of the bear channel it had been in since late September, however there is still a way to go to turn the tide for bulls.
- Technicals remain bearish on the pair, with spot still trading comfortably below its 50,100 and 200-day EMA, and also the 20-day EMA at $1.0665 in today's session.
- Bears look to break 2022 lows at $1.0470, opening up 2021 lows at $1.0280.
- To reverse the trend, bulls will have to first break the 50-day EMA at $1.0786 after which they can then target 100-day EMA at $1.0898.
- Relative central bank pricing continues to point to further downside in the cross. Futures markets are pricing in ~13 bps of hikes into the February RBA meeting with a terminal rate of 4%, whilst across the Tasman OIS markets have ~70 bps priced into the RBNZ February meeting with the terminal rate at 5.57%. OIS markets do price in RBNZ rate cuts in 2023, however at the end of 2023 market expectations still price the RBNZ policy rate ~100bps higher than the RBA.
- The AU-NZ 2 swap spread is comfortably off mid-December lows (near -160), last around -138, but the rate of improvement (in AUD's favor) has slowed somewhat.
Fig 1: AUD/NZD Spot Broken Out Of Bear Channel
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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