Free Trial
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.
NZD
NZD/USD strength post the Q4 CPI has proven to be short lived. The pair is back to the 0.6480 level, off a little over 0.30% versus NY closing levels. We did get to 0.6525 immediately post the CPI print. Kiwi sentiment is being weighed on, as the market contemplates the RBNZ outlook amidst signs of peaking inflation pressures. The reaction has been noticeable in terms of NZ-US swap spreads, with the 2yr down around 15bps so far today, see the chart below.
- NZD/USD hasn't been that well correlated with spreads this year, with the weaker USD trend and better equity tone dominating, but this chart suggests a less supportive rates backdrop for NZD.
- From a technical standpoint, recent ranges have been respected with support coming in below $0.6480 today. If bears sustain a break through $0.6480 they can target Mondays low at $0.6438. Bulls look to break $0.6530 to regain the momentum.
Fig 1: NZD/USD Versus NZ-US 2yr 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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok