NZD is still a better case than AUD – Nordea Markets

Analysts at Nordea Markets explain that RBNZ is probably the G10 central bank that still holds the most dovish view on inflation (compared to the outlook) and NZD is currently the most hated G10 currency by non-commercial positions. 

Key Quotes

“This leaves upside risks for the NZD. We continue to favour such a bet against the AUD.”

“Given the late-cyclical mindset of markets, we are still looking to re-enter short AUD positions elsewhere also. Despite taking a slight step in the direction of putting more trust in global wage developments, it would still be out of the ordinary to see the RBA moving towards a rate hike in the present commodity environment. Usually the CRB commodity index needs to be up by 10% year on year, before the RBA considers a hike. Currently we are still some way below that.”