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8 Apr 2013
Forex Flash: New Zealand strategy profile – Westpac
FXstreet.com (Barcelona) - The NZD has performed well but looks far from convincing. That is because global risk appetite has been dented by Cyprus and Italy, weak US data, North Korean tension, and bird flu. According to Global FX Strategist Sean Callow at Westpac, “NZD momentum remains positive for a possible push above 0.8450, but global risks argue against it.”
In terms of NZ swaps, the decline in interest rates since mid-February is not yet complete, global risks continuing to weigh. The 2-year swap yield targets 2.80%, but it could extend to 2.70%. Meanwhile, lower global yields are flattening the NZ curve. The 2-10 year curve has broken below trend support at 109bp and now targets 100bp and then 97bp.
In terms of NZ swaps, the decline in interest rates since mid-February is not yet complete, global risks continuing to weigh. The 2-year swap yield targets 2.80%, but it could extend to 2.70%. Meanwhile, lower global yields are flattening the NZ curve. The 2-10 year curve has broken below trend support at 109bp and now targets 100bp and then 97bp.