FXStreet (Barcelona) – With Australian April retail sales and trade balance data disappointing the markets and easing expectations from the RBNZ seen as overpriced, the BNP Paribas teams prefers going short on AUD/NZD, targeting 1.0340 levels.
Key Quotes
“Both the retail sales and trade balance data from Australia overnight disappointed against market expectations. Retail sales were flat in April, versus expectations for a 0.3% rise. The prior release was also revised lower by 0.1pp to 0.2%. Meanwhile, the trade deficit in April widened to AUD 3.89bn, the largest deficit on record. The dramatic widening was driven by a combination of both falling exports (driven partly by declines of the prices of Australia’s commodity exports) and rising imports (driven partly by rising fuel costs).”
“Following a rebound over the past week, AUDNZD is now poised to resume a downward trend.”
“The next key event will be the RBNZ policy meeting on 10 June where we view that the market is overpricing a the likelihood of a rate cut (the market is pricing a 50% probability).”
“We remain short from 1.0780 targeting 1.0340.”
(Market News Provided by FXstreet)