ridethepig | Looking at AUDNZD from 40,000ft

19 thg 12, 2019

On the AUD side, RBA crystal clear about conditions needed for further easing and unlikely in the near-term. Unemployment overshooting may be the start of a round of good data for AUD which will keep the RBA on hold meaning markets will need to price out all of those betting on a RBA Feb rate cut.

On the NZD side, RBNZ slightly hawkish surprise in the last meeting and see a lot of NZD shorts left that that need unwinding. Although into year-end NZD also spiking higher but rather than from good data it was with a positional squeeze into 0.66xx before running out of steam. With that in mind I see both AUD and NZD as bullish vs USD but AUD has more room to outperform if data holds:

A “Royal Flush” for us and the Commodity Currencies. As widely mentioned yesterday, stronger AUD employment data sending AUDUSD flying towards the 0.69xx handle:

I am looking to close longs at 0.695x which is still the same level in play from the larger swing into year-end:

For those holding since October when we loaded the breakup we will have to wait till 2020 to clear final targets:

For the AUD macro map:

For the NZD macro map:

As usual thanks for keeping the support coming with likes, comments, questions and etc! Feel free to jump into the conversations in the comments with your views/charts. If we get enough interest we will have a round of Fixed Income chart updates coming for AU and NZ.