Barclays recommend tightening stop loss on long AUD/NZD

Barclays Research:

• Recommend tightening the stop loss on long AUD/NZD trade to $1.0818 from previously $1.0609
• They still target $1.1085, & expect a move to $1.1400 over the coming year

Say the higher AUD/NZD “has reflected a multitude of factors, including:

• 1)Yesterday’s RBNZ July OCR Review statement
• 2)Weaker-than-expected NZ Q2 CPI inflation (1.6% y/y; cf. 1.8% y/y) and stronger-than-expected Australia Q2 underlying inflation (2.8% y/y; cf: 2.7%;
• 3)An almost 14% decline in dairy prices (New Zealand’s largest export) at GlobalDairyTrade’s online auctions in July, meaning dairy prices have now fallen by more than 40% YTD;
• 4)Further declines in NZ house prices, -0.3% m/m in June following a 1.2% m/m decline in May.”

Also that “The next key events for AUDNZD are the 5 August RBA meeting, the 6 August NZ labour market data and the 7 August Australia jobs report.”