AUD/NZD: what's the outlook? - ANZ

Analysts at Westpac offered their outlook for the antipodean cross and rates.

Key Quotes:

"AUD/NZD 1 day: Direction today will be largely dependent on the AU jobs data outcome, plus the composition of the NZ government announced today.

AUD/NZD 1-3 month: September’s downward correction should give way to a resumption of the trend rise which started in June, and test 1.12, contingent on AU commodity prices recovering and risk sentiment remaining elevated. (4 Oct)

AU swap yields 1 day: The 3yr should open around 2.14%, the 10yr around 2.91%.

AU swap yields 1-3 month: Our RBA outlook (on hold throughout 2018) is anchoring short-maturity interest rates and should keep 3yr swap rates in a 1.80% to 2.30% range, as long as core inflation remains below 2%. Longer maturity rates will largely follow US rates. (4 Oct).

NZ swap yields 1 day: NZ 2yr swap rates should open up 1bp at 2.21%, the 10yr up 3bp at 3.21%, in response to AU and 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 2.10% to 2.50% range, as long as inflation remains below 2%.  Longer maturity rates will largely follow US rates. (4 Oct)"