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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.
AUDNZD
AUD/NZD is ~0.4% firmer this morning, Q4 GDP from New Zealand printed below expectations early in the session.
- The cross prints at $1.0730/40, rising from $1.0692 from pre- data.
- In the aftermath of the GDP print RBNZ dated OIS has softened, with 10bps of hikes now priced into the April meeting. Terminal OCR expectations dropped to 5.08%, well below the RBNZ's projected OCR peak of 5.50%. ASB have revised their call for the April meeting to a hike of 25bps.
- Offsetting this RBA dated OIS are now showing RBA cuts priced in for August. Rate differentials via 2 year swap rates, now point to further possible downside in the cross.
- The Australian labour market report from Australia is on the wires in just under an hour. The Bloomberg survey median estimate looks for a net gain of 50k jobs and a headline unemployment rate of 3.6%.
- As we noted yesterday, relative current account balances remain firmly in AUD's favor (see this link). This remains a medium term support for the cross, but could be swamped by relative rate spread developments today.
Fig 1: AU NZ 2 Year Swap vs AUDNZD Spot
Source: 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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