AUDNZD looks weak as bond yield spread dives lower

Author: Giles Coghlan | Category: News

AU10y-NZ10y

The Aussie 10 year and New Zealand 10 year spread has dived lower again. This is in keeping with the divergent outlook between the RBA and the RBNZ. A puzzle over the last two weeks has been NZD weakness despite a more hawkish tilt from the RBNZ. This has made the AUDNZD a pain to trade/

However,  it now looks like the bond yield spread dipping will drag this pair lower from major resistance. Look out below. Remember the bond yield spread is a kind of 'relative performance proxy' for each economy. When the bond yield spreads dip, so too does the price. Just put the quote bond first when plotting the spread , in this case AU10Y. 
AU10y-NZ10y

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