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NZD and AUD outperformed in Asia – Societe Generale

FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, remarked the momentum of the AUD and NZD.

Key Quotes

"The overnight news came mostly from New Zealand and Australia. In New Zealand, house price inflation has slowed to 5.7% y/y, and home sales fell 13% y/y."

"The futures market still prices a further 25bp rate rise, but the cycle is turning and the NZD's fortunes are turning. We like long-term longs in AUD/NZD and CAD/NZD on relative value bases, and in shorts in NZD/USD on valuation."

"In Australia, the news was, by contrast, positive. NAB Business Confidence rose to its highest level since last September and house price inflation at 10.1% was stronger than expected."

"Interestingly, AUD bill futures dropped only 2bp along the curve and the AUD got no help at all. AUD has failed to get a lift from the better risk mood in recent days, robbing ‘rally-sellers' of better levels to go short."

"The only other data overnight was the UK BRC sales release, with like-for-like sales down 0.3% y/y, a second monthly fall. Tomorrow's labour market data and Inflation Report are more important, of course, but GBP/USD's downtrend continues."

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