For AUD/NZD, analysts at Westpac noted that the 1.0700 area repelled many attempts at a break higher yesterday.
"The AU jobs data today may catalyze another test.
AUD/NZD 1-3 month: Higher to the 1.0650-1.0770 area, mainly for valuation reasons. The cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment. (11 Jan)
AU swap yields 1 day: The 3yr and 10yr should open around 2.16% and 3.06%, 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 up 1bp at 2.38%, the 10yr up 2bp at 3.56%.
NZ swap yields 1-3 month: The RBNZ ended its easing cycle on 10 Nov and will remain on hold for a long time. That will anchor the short end somewhat (although the 2yr-OCR spread – one measure of stretchedness – could rise further given historical precedents) with the long end free to follow offshore yields. The curve steepening trend should continue. (14 Nov)".
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