Analysts at Westpac offered their outlook for the antipodean cross and rates for the days ahead.
"AUD/NZD 1 day: Broke below a two week sideways range of 1.1030 and 1.1145, signaling more to come (technical target 1.0925) in this corrective move. AU jobs data today will be key.
AUD/NZD 1-3 month: A retest of the 1.1200 area seen in April is possible if iron ore’s rally since mid-June continues and global risk sentiment remains elevated. (4 Sep)
AU swap yields 1 day: The 3yr should open around 2.11%, the 10yr around 2.87%.
AU swap yields 1-3 month: Our RBA outlook (on hold for some time) is anchoring short-maturity interest rates and should keep 3yr swap rates in a 1.8% to 2.3% range, as long as core inflation remains below 2%. Longer maturity rates will largely follow US rates. (8 Aug).
NZ swap yields 1 day: NZ 2yr swap rates should open up 1bp at 2.17%, the 10yr up 2bp at 3.12%, in response to US interest rates movement overnight.
NZ swap yields 1-3 month: Our RBNZ outlook (on hold throughout 2018) is anchoring short-maturity interest rates and should keep 2yr swap rates in a 2.1% to 2.6% range, as long as inflation remains below 2%. Longer maturity rates will largely follow US rates."
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