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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.
AUDNZD
Relative business conditions in Australia and New Zealand continue to diverge. NAB Business Conditions in Australia printed at +13, prior read was revised higher to +12. Still, even with this resilient result, the chart below shows that there is more potential downside in the AUD/NZD cross. NZ business activity, per the ANZ survey, is back to late 2021 levels.
- Offsetting this is the narrowing of rate differentials, observed via 2-Year Swap Spreads, which have narrowed from -150bps in mid-October to sit at -77bps this morning.
- RBNZ Governor Silk also noted in a speech this morning that previous tightenings are showing an impact in terms of reducing demand and inflationary pressure (BBG). This suggests the better business activity outlook painted by the ANZ survey needs to show up in demand, inflations indicators, before shifting the RBNZ outlook.
- The next major data release for the cross is tomorrow's Q3 WPI from Australia, an increase of 1.3% Q/Q is expected. On Thursday The October Labour Market Report from Australia crosses, the headline unemployment is forecast to tick higher to 3.7% from 3.6%.
Fig 1: AUD/NZD Daily Spot vs AU NZ Relative Business Conditions
Source: MNI/BBG
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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