Our bullish AUD/NZD Blueprint call has come under pressure in the past threeweeks. In part this reflects Chinese developments that have weighed on someAustralian commodity prices. In contrast, NZ commodity prices have continuedto strengthen, boosting NZD on most crosses. With NZ commodity prices atlevels they have struggled to exceed in recent years, with sentiment on Chinaplays boosted by the greater post-Plenum detail released Friday, and with keyrate differentials suggesting AUD/NZD is now “cheap”, we retain our bullishAUD/NZD view for now, although we will reassess on a weekly close below 1.12.
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Deutsche Bank