J.P.Morgan Recommend Long EUR/NZD Position

Late on Friday J.P.Morgan noted that the “NZD remains a strategic short for us - momentum has picked up following the RBNZ 50bp surprise earlier in the month, and we add to existing shorts via a EUR/NZD long cash position.”

• “Softening NZ data and an aggressive RBNZ smacks more stagflationary, which looks more problematic relative to the Euro area’s recent momentum as the ECB continues its policy normalization catch-up. We’ve upgraded our Q2 Eurozone GDP forecast on the back of firm April PMIs, and there’s upside risk embedded in the ECB outlook. In essence, this juxtaposes two currencies where we have some confidence in tactical diverging momentum.”
• The long EUR/NZD trade recommendation came with the cross printing NZ$1.7860, with a stop loss set at NZ$1.7410.