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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.
MARKET INSIGHT
- AUD, NZD and CAD underperform most other majors today, making relatively little inroad into broader USD weakness despite oil gaining strongly in the case of CAD and AUD.
- AUD weakness in particular stems from the dovish surprise from the RBA hiking 25bp vs the 50bp largely expected/priced, triggering a sizeable re-pricing lower of 2023 rate expectations, but that could start to be a sign of household indebtedness beginning to weigh on hiking expectations.
- It’s notable that these three countries see some of the highest household debt levels in the G10, with Canada and NZ ~100% GDP and Australia closer to 120% GDP [chart 1], which as fixes from post-pandemic purchases begin to come up for refinancing could increasingly weigh on households.
- Should a pivot away from the recent highs of terminal rates drive a wedge lower to Fed pricing, which is yet to be seen in 2Y2Y OIS [chart 2], it could increasingly weigh on these crosses.
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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