Narrow Ranges Persisting, Rate Differentials At Cycle Lows, RBNZ On Tap

AUD/NZD prints at $1.0575/85, the pair is little changed from yesterdays closing levels. There was little reaction to the New Zealand Q1 Retail Sales print which came in at -1.4% Q/Q vs 0.2% exp.

• Narrow ranges are persisting as the cross see-saws around the $1.06 handle. Fresh YTD lows were printed on Monday at $1.0560, however the move didnt follow through and a $1.0570/1.0610 range has persisted in recent dealing.
• Rate differentials, observed via 2 year swap rate, have widened to a cycle low of -167bps. The spread was as narrow as -129bps early last week.
• On the downside bears target a break of $1.0560 low from May 22. A break through here opens $1.0471 the 2022 low.
• Bulls look to break $1.0608 the high from May 23, which opens up the 20-Day EMA ($1.0668).
• The RBNZ's latest monetary policy decision is on tap today. The bank is expected to raise the OCR 25bps to 5.50%.