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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 correlations with 2,5 and 10 year yield differentials have strengthened over the past week. Yields stood out as the core driver in NZD/USD in recent trading, with commodity prices also a notable driver. The table below presents levels of correlations between NZD and key macro drivers (note the yield differential reflects swap rates).
- In a week heavy on Central Bank decisions and key data releases, 2-year yield spreads were the dominant driver of the NZD/USD. The 2-year spread narrowed from ~54bps to ~27bps, as the NZD/USD fell ~2.5% through the week.
- Weakness in global commodity prices also weighed on the NZD, with the monthly correlation also remaining strong.
- The recent outperformance in global equities last week, compared to other assets, didn't aid the NZD, although longer term correlations does remain strong.
Fig 1: NZD/USD Correlation With Macro Drivers
Source: Market News International (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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