NZD to outperform AUD ahead of next week’s RBA meeting – Barclays

Barclays Research discusses NZD outlook and adopts a neutral bias in the near-term.

“The NZD will likely track broader risk sentiment but could
outperform the AUD, especially on any derisking on data, developments or
ahead of the RBA (5 Apr). Amid improving global risk sentiment
and a continued rise in commodity prices, NZDUSD is extending its
uptrend after breaking above 200dma (0.6913) last week,” Barclays
notes.

“With no domestic catalyst until the 13 April RBNZ meeting, the NZD
is likely to remain driven by global developments. 1y RBNZ OIS pricing
moved 18bp higher last week to 3.13%, with markets still assigning a
relatively high probability to a 50bp move (43bp priced in) at the next
meeting. Looking ahead, we expect the NZD to grind higher towards 0.71 by end-2022, after near-term consolidation, with terms of trade improvement, reopening of its economy and RBNZ tightening,” Barclays adds.

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