NZD: Hits Fresh Multi Month Highs, Uptrend Still Intact

Bloomberg reported that US crude inventories fell 4.49mn barrels last week, according to people familiar with the API data.  There was an 854k drop at Cushing. In terms of products, distillate stocks rose 2.24mn but gasoline declined 1.97mn. The official EIA data is out later on Wednesday.

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg 
• RES 1: 96.860 - High Apr 07
• PRICE: 96.610 @ 16:23 BST May 6
• SUP 1: 95.900 - Low Jan 14  
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures continue to circle just below recent contract highs, having cleared resistance on the continuation contract. The rally has taken out resistance at 96.730, the Sep 17 ‘24 high. On the downside, any reversal lower from current levels would signal a resumption of a downtrend. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low. 

Overnight the average whole milk auction price rose to $4374, from $4171 at the previous auction (held mid April) (per the GDT website, see this link). This is fresh highs for this auction result going back to early 2022. The rise was close to 4.9% compared to the previous auction. 

• All else equal this supports NZ's terms of trade backdrop. The orange line on the chart below is the NZD Citi terms of trade proxy, with the white line the average whole milk auction price. 

Fig 1: Whole Milk Auction Price

Source: Citi/GDT/MNI - Market News/Bloomberg