AUD/NZD: 1.0825 vulnerable - Westpac

Analysts at Westpac offered their outlook for AUD/NZD and rates.

Key Quotes:

"AUD/NZD 1 day: The correction of the Feb-Mar rally persists, 1.0825 vulnerable, and 1.0760 possible multi-day (50% retracement).

AUD/NZD 1-3 month: Higher to 1.10+. The cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment, although is closing the gap (6 Mar).

AU swap yields 1 day: The 3yr and 10yr should open around 2.08% and 2.98%, respectively.

AU swap yields 1-3 month: The 3yr has probably based at 1.60%, the RBA expected to sit tight at a 1.5% cash rate for some time. (7 Nov)

NZ swap yields 1 day: NZ 2yr swap rates should open unchanged at 2.31%, the 10yr down 1bp at 3.44%.

NZ swap yields 1-3 month: The RBNZ said it has ended its easing cycle and will remain on hold until 2020. That will anchor the short end, although markets will not abandon their expectations for earlier tightening which means occasional spikes in the 2yr will be likely. The long end will continue to follow mainly US yields, which we expect to rise. That means the curve steepening trend should continue. (17 Feb)"