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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.
NZD
NZD/USD is up ~5% from lows seen in early January. The pair has consolidated gains above $0.64, a level we had previously flagged earlier this month.
- The pair now looks for a close above $0.6468, the high from August 2022. Bulls have had several tests above this level last week, but have struggled to hold gains, however we are trading above this level today.
- A bullish technical trend remains in place, a close above current levels opens the Jan 18 high at $0.6530 and the 123.6% Fibonacci projection of the Oct-Dec rally at $0.6752.
- Bears look to break the 20-day EMA at $0.6378, a break through here opens the 200-day EMA at $0.6275.
- The 2 year NZ US Govt bond yield spread is a touch off levels seen last week as the spread continues to moderate after breaching +60bps in mid December. NZD/USD is outperforming relative yield spread trends over this period. The better tone to global equities is providing an offset though.
- The relative rates outlook remains mixed for both NZD and USD. OIS markets show NZ OCR peaking at ~5.4% in mid 2023, with ~35 bps of cuts priced in for H2 2023. Fed Funds Target Rate is priced to peak at ~4.9% in OIS markets with ~40bps of cuts priced in for H2 2023.
Fig 1: NZD/USD Daily Spot, EMAs
Source: Market News International (MNI)/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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