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.
AUD/NZD prints shy of yesterday’s near 12-month high, last dealing little changed at NZ$1.0860. Note that the multi-month rally in the cross has been aided by the AU/NZ 2-Year swap spread moving away from its trough, although market pricing surrounding central bank tightening on both sides of the Tasman seems a little aggressive, to say the least. Meanwhile, the gap between the cross and the aforementioned 2-Year swap spread can probably be best explained by the relative improvement in Australian terms of trade vs. NZ, owing to the well documented rally in commodity prices (although the commodity move has pared back from its recent extremes).
- When it comes to the cross, a break above yesterday’s near 12-month high (NZ$1.0875) would allow bulls to look to the NZ$1.0900 level. Beyond there. Firmer resistance is seen at the ’21 high (N$1.0947). Support is located at the base of the steep support line drawn off the mid-March lows (NZ$1.0760 today).
Fig. 1: AUD/NZD vs. Australia/New Zealand 2-Year Swap Spread (%)
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.