Following their note Yesterday,.........>

AUSSIE-KIWI: Following their note Yesterday, Westpac have gone long AUD/NZD at

NZ$1.0655, targeting NZ$1.0900 or higher, with a NZ$0.01 trailing stop at

NZ$1.0550 initially.

- Westpac note that "the NZD has outperformed all G10 currencies over the past

four months, and has fully priced a strong set of GDP, CPI, and jobs data, as

well as a less dovish RBNZ. NZD/USD is now 2% above fair value. In contrast,

AUD/USD is 2% below fair value, arguably carrying too much weight from

Australian political risks and the US-China trade war. The RBA is bullish on

growth and will also have taken heart from the uptick in wages growth in Q3.

Meanwhile, the RBNZ is more cautious about the persistence of growth and is

willing to tolerate an inflation overshoot. AUD/NZD short term fair value, based

on yield spreads and relative commodity prices, is NZ$1.12."

- Westpac identifies risks to the position as follows; Global stock markets

continue to fall, failure of Trump-Xi discussion on trade, further weakness in

Australia's housing market & a rebound in NZ's housing market, and in turn,

retail spending.