NZD: NZD/USD Continues Sell-Off, Trading At Yearly Lows
Dec-12 21:35
- NZD/USD fell 0.33% to 0.5766 on Thursday and is currently trading at yearly lows, the pair did tests these levels on Wednesday before finding some support. The moves comes as the USD continues to strengthen, with the BBDXY closing 0.28% higher overnight, supported by higher us tsys yields which rose 4-7bps overnight.
- US PPI picked up by more than expected in November, at +0.4% (0.38% unrounded) M/M vs 0.3% prior (0.25%, reflecting an upward revision from 0.20% initial). The core indices were cooler though: ex-food/energy registered 0.2% (from 0.3% prior, in line with expectations) and the more important ex-food/energy/trade services printed an 18-month low of 0.05% unrounded (0.34% prior, and vs 0.2% expected).
- The pair hovers near its two-year low at 0.5766, the pair continues to trade below all key EMAs, signaling bearish momentum. The RSI nearing oversold territory, currently at 34, while the MACD remains only slightly negative.
- Immediate support lies at 0.5761 (Dec 12 & Yearly lows), a break here could open a larger move lower with the next major support not until the 2022 lows at 0.5500. Resistance levels are seen at 0.5872 (20-Day EMA), a break above here and 0.5900 becomes the target.
- The OIS market has 43bps of cuts priced in for the Feb meeting this has held steady most of the week. There is a cumulative 108bps of cuts priced in through to October 2025.
- The NZ-US 2yr swap was steady on Thursday holding at -55bps, just off the multi-year lows of -60bps made last week.
- There are some large option expiries over the next few sessions: 0.5620 ($759.28m), 0.5855 ($705.63m), 0.5970 ($745.4m)
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AUD: Risk Appetite Weighs On A$, Wages Data Coming Up
Nov-12 21:08
The US dollar continued to climb driven by higher yields and softer equities with the USD BBDXY index up another 0.5% to be 2.1% higher since November 5. Weaker risk appetite weighed on Aussie and it underperformed. AUDUSD is down 0.6% to 0.6539 but recovered from the low of 0.6518 as the S&P picked up.
- AUDUSD remained above support at 0.6513, November 6 low and bear trigger, but the bear cycle has been reinforced by this week’s sell off. Initial resistance is at 0.6676, 50-day EMA.
- GBP underperformed the G10 leaving AUDGBP up 0.4% to 0.5128, close to the intraday high. The euro was one of the better performers though and so AUDEUR is down 0.3% to 0.6153 after falling to 0.6144.
- The yen continued to underperform and so AUDJPY is little changed at 101.08. AUDNZD is flat at 1.1026 after a high of 1.1031.
- Equities were weaker with the S&P down 0.3% and Euro stoxx -2.3%. Oil is flat with WTI at $68.04/bbl. Copper fell 1.9% and iron ore is around $100.50/t.
- Today Q3 WPI prints and is expected to rise 0.9% q/q bringing the annual rate down to 3.6% from 4.1% in Q2.
