$AUDNZD - Heading towards parity with RBA rate cut pending.

2015년 2월 28일

Technicals :

We saw a small correction towards the trend line and the marked red zone (1.04800 area)
Correction has been confirmed with previous floor broken at 1.0350 area.
We are looking for the trend line to act as resistance till the pair hits parity.

Fundamentals :
NZD

RBNZ will keep its policy rate unchanged until early 2016.
New Zealand Fonterra dairy prices are starting to pick up.
ANZ Business confidence for February 34.4 vs 30.4 prior.
ANZ Activity Outlook for February 40.9 vs 37.3 prior.

AUD
Headlines currently causing AUD weakness and supporting our Dovish Stance.

Latest Bloomberg survey - 16 of 27 economists survey see RBA cut in March.
Market pricing has the probability of a cut at around 65%.
Westpac - The Reserve Bank Board meets next week on March 3. We expect that it will decide to cut to overnight cash
rate by 25bps.

Unemployment rose from 6.1% to 6.4%


Thoughts from JPMorgan after Capex:

Numbers look pretty bad
The estimate for 2015-16 was disappointing. It's around $10 billion less than we were calling for. And it's soft across the board
Mining is set to fall further
Manufacturing was revised down again. That's not a surprise, but there's not much sign of a revival in other sectors either
This lack of animal spirits is not what the RBA has been hoping for. It does add to the chance of a rate cut next week, though we think they will hold on to May
The survey was taken before this month's easing and we haven't seen what impact that has had on confidence