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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.
NZD
NZD/USD has risen over 2% in recent sessions. The Fed rate hike cycle repricing, in the wake of the collapse of SVB and Signature Bank, has seen the 2-Year Rate Differentials observed via swap spreads widen by ~83bps to levels last seen in late May 2022.
- NZD/USD found support below $0.61 firming as much as 3% from 2023 lows before moderating gains, this comes as rates markets re-price expectations for the Fed rate hiking cycle.
- Fed dated OIS has ~30bps of hikes priced into what is left of the hiking cycle, with ~15bps hike priced for March. The terminal rate is now seen at ~4.8% in May. There are over 90 bps of cuts priced in before the end of 2023.
- 2-Year Rate Differentials now sit at +109bps, with 2-Year Swap spread now the widest since late May 2022 when the NZD/USD was ~3 cents higher.
- Bulls look to break the 200-day EMA at $0.6265 having met resistance ahead of the level yesterday. Bears first look to break 2023 lows at $0.6085.
- Today's US CPI print presents the next macro risk event.
Fig 1: NZ US 2 year Swap Spreads v NZD/USD Daily 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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