From the latest RBS ‘Global Currency Themes’, a little snippet of interest to Australian dollar traders (and a mini-snippet of interest to NZD traders too):
AUD | Watch Chinese swap rates that have been significantly negatively correlated with the AUD (and other regional risk-sensitive currencies) since last year, with higher rates in China, signalling tightening financial conditions, in the past coinciding with a falling AUD. The risk of an RBNZ rate hike … is more evenly balanced than currently priced into the market. But the recent downshift in rates further out the curve looks about right.
The whole report from RBS is interesting, I’ll pull out some more bits an pieces and post them up (and a big thanks to you-know-who-you-are for the report and others).
On the brief bit about the RBNZ, I posted this yesterday: At least one analyst expects no hike from the RBNZ this week
I’m currently in the ‘Yes, the RBNZ will hike this week” camp.
