AUD/NZD: on CPI, a push for a test of 1.1335? - ANZ

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

Key Quotes:

"AUD/NZD 1 day: Higher towards 1.1335 (March 2016 high) if NZ politics and AU CPI are supportive.

AUD/NZD 1-3 month: A resumption of the trend rise which started in June should test 1.13 contingent on AU economic data remaining supportive, commodity prices recovering, risk sentiment remaining elevated, and NZ politics weighing on the NZD. (25 Oct)

AU swap yields 1 day: The 3yr should open around 2.17%, the 10yr around 2.96%.

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 2bp at 2.18%, the 10yr up 5bp at 3.25%, 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."