NAB "see the recovery in AUD/NZD over...>

AUSSIE-KIWI: NAB "see the recovery in AUD/NZD over the past few weeks as

justified, post the overshoot to parity. NZ's government-imposed lockdown has

been more restrictive than Australia's which could impart a more permanent scar

on the NZ economy as businesses fold. While Australia's fiscal policy response

to COVID-19 has been meatier than NZ's so far, we'd expect NZ to catch-up and

overtake, to fill a deeper economic hole. Importantly, the RBNZ's likely QE path

is much greater than the RBA's, a positive force for AUD/NZD. China's COVID-19

recovery should be supportive for bulk commodities while the outlook for milk is

challenged by a ramp up in EU and US supply. Based on these macro factors, the

rise in the cross could have a lot further to run. ST and LT valuation metrics

are higher than current spot. Key technical resistance is at NZ$1.0850."