2 Jul 2013
Flash: NZD/USD rally to be short-lived – Westpac
FXstreet.com (New York) - According to Global FX Strategist Sean Callow at Westpac, “The Fed’s tapering signal remains depressive for NZD/USD, as a break below 0.7685 remains on the cards this week.”
In terms of rates in New Zealand, the NZ 2-year swaps should remain capped at 3.25% and head towards 3.08%, while the 2023 NZGB should be capped by 4.26% and head towards 3.95%.
Multi-month, though, 2023 yields should start heading towards 4.75%, driven by expectations for Fed tapering and RBNZ tightening. Moving to the NZ curve, the 2-10year swap curve has steepened quickly - 45bp in less than 2 months - and should consolidate in the 125bp-140bp area this week.
In terms of rates in New Zealand, the NZ 2-year swaps should remain capped at 3.25% and head towards 3.08%, while the 2023 NZGB should be capped by 4.26% and head towards 3.95%.
Multi-month, though, 2023 yields should start heading towards 4.75%, driven by expectations for Fed tapering and RBNZ tightening. Moving to the NZ curve, the 2-10year swap curve has steepened quickly - 45bp in less than 2 months - and should consolidate in the 125bp-140bp area this week.