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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
AUD/NZD is dealing above the NZ$1.08 handle for the first time since late November, as bulls look to re-establish an uptrend. Since printing the 2021 low in mid December the pair has rallied over 3%.
- Technicals paint a mixed picture. While the cross is still comfortably below its 100 and 200-day EMAs, it has broken the 20 and 50-day EMAs and formed a bull channel.
- Bulls will firstly look to close above $1.08, opening up a test of the 100-day EMA at NZ$1.0889.
- To halt the turning tide bears look to firstly break the 20-day EMA at NZ$1.0702, which comes in just above bull channel support.
- Relative central bank pricing continues to support further downside in the cross. Futures markets are pricing a ~15bp hike into the February RBA meeting, alongside a terminal rate of 3.92%. Across the Tasman OIS markets have a ~70 bps hike priced into the RBNZ February meeting with the terminal rate seen at 5.53%. OIS markets do price in RBNZ rate cuts in 2023, however, at the end of 2023 market expectations still price the RBNZ policy rate ~130 bps higher than the RBA's.
- The AU-NZ 2 swap spread is comfortably off mid-December lows (near -170bp), last around -135bp, but the rate of improvement (in AUD's favor) has picked up pace in recent dealing.
Fig 1: AUD/NZD Spot Recovering in Bull Channel
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.
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