AUD/NZD outlook: headed into a very important area - Westpac

Analysts at Westpac offered an outlook for the antipodean and rates.

Key Quotes:

"AUD/NZD 1 day: The break above 1.0710 brings into sight the very important 1.0670 area (a technical “neckline”). A break above that implies a multi-cent rise is in store.

AUD/NZD 1-3 month: Higher to the 1.0770 area at least. The cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment. (17 Feb)

AU swap yields 1 day: The 3yr and 10yr should open around 2.14% and 3.05%, 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 little changed at 2.33%, the 10yr at 3.53%.

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."