AUDNZD - Five Year Lows

[winner69]

Reading comments people make on Confidence Surveys etc i never know whether to cry or laugh when several think it is their entitlement to have a weak / low nzd and feel hard done by when it goes against them

[winner69]

Wonder what our mate Wheeler is thinking now?

He needs to stop worrying about the NZD and earn his keep on worrying about other things

Then again be good if he did bit more jaw boning

[peat]

Wonder what our mate Wheeler is thinking now?



Then again be good if he did bit more jaw boning

or he could just sell it by the yard.

[Daytr]

Well depends what you mean by performing well.
Don't get confused by a world chasing yield with performance.
We do have political stability and that is certainly better than the rotational PM job in Aussie.
However parity for the cross is not a good thing, although it does help with our imports from across the ditch including building materials to support the housing boom.
The economy is being driven by immigration, so depends on your view there is a substantial cost to that.
Government spending should be rising by 5-10 billion every year to cater for the new infrastructure, social spending etc for the increase in population.
However we aren't seeing that as they can't fund it, so its not sustainable and they are creating a government budget crisis one day that will require catch up. Where I live we have massive infrastructure issues and they are so far behind its already creating problems in regards sewerage, roads and town planning. Anyway enough of the political rant.
I have been building a large position in the cross shorting the Kiwi. Perhaps we will see it go lower, however I get the feeling the RBNZ may have already been in the market. There was a massive move the other night pushing it back toward 1.04, obviously it didn't hold.
If it moves lower I will add to the position as I can't see this level being sustained.

Parity - that be good

Says the country is generally doing pretty well

[winner69]

Daytr - You having a great time with your punts on the VIX etc. well done

Can't really go wrong with your punt on the AUD/NZD either can you - if nothing else the cycle is in your favour. No doubt we will see 75/1.33 (whichever way you look at it) again some time in the future. How much you make probably depends on how patient you are.

[Valuegrowth]

Thank you Daytr for your good analysis. I already became a big bear for both NZD and AUD.

Well depends what you mean by performing well.
Don't get confused by a world chasing yield with performance.
We do have political stability and that is certainly better than the rotational PM job in Aussie.
However parity for the cross is not a good thing, although it does help with our imports from across the ditch including building materials to support the housing boom.
The economy is being driven by immigration, so depends on your view there is a substantial cost to that.
Government spending should be rising by 5-10 billion every year to cater for the new infrastructure, social spending etc for the increase in population.
However we aren't seeing that as they can't fund it, so its not sustainable and they are creating a government budget crisis one day that will require catch up. Where I live we have massive infrastructure issues and they are so far behind its already creating problems in regards sewerage, roads and town planning. Anyway enough of the political rant.
I have been building a large position in the cross shorting the Kiwi. Perhaps we will see it go lower, however I get the feeling the RBNZ may have already been in the market. There was a massive move the other night pushing it back toward 1.04, obviously it didn't hold.
If it moves lower I will add to the position as I can't see this level being sustained.

[Edwood]

How are you trading VIX Daytr (i.e., what instrument code are you using?)
Agree with you on AUDNZD, have an average price around .957 - MACD divergence points to a kick higher

[Daytr]

Through a CFD via CMC markets.
Should have hung on. Mind you it dipped considerably for 24 hours before charging into the 18s!
Can't complain, I made very good money.
Now hopefully there will be a big mover in the Kiwi cross!

[winner69]

Goldman Sachs analyst is one of the few sensible analysts around - he says NZ don't need any more rate cuts

http://www.bloomberg.com/news/articl...imb-over-rates

[Hoop]

Goldman Sachs analyst is one of the few sensible analysts around - he says NZ don't need any more rate cuts.......

I've thinking the same too..at the moment....my my.. how my thinking has changed this last month... going from should've been a rate drop to 1.75% .. to now, the 2% should not be lowered..

I've been watching the NZ interest rate market movements for some time now....they took an "unhealthy" dive 2 months back, when the market created a partially inverted yield curve. I mentioned "unhealthy" because the Inverted yield curve is one of my "ducks" .. when many ducks line up in a row a recession usually begins..While the market was diving the NZRB lowered the rates from 2.25 to 2.00% , although the 0.25% fall corrected the yield curve..at that time I questioned whether a rate cut should've been to 1.75% as there was a lot of negative sentiment washing around most markets and the yield curve was looking rather flat......

Since mid August.. I got a gut feeling something suddenly changed, the world financial sentiment entered a "happy space". There was an absence of bad news and for a month the Bulls rallied...

Then last week a sharp world wide equity correction occurred using the same old lame, well worn excuse (FED to raise rates at some near future point in time)..

Positive Sentiment towards NZ has remained and recently intensified..with more "happy" news about the NZ economic growth..sort of brings back memories of the "Rock Star Economy" status..eh?

What didn't respond to the recent world wide Equity correction and a new phase of "worrying sentiment" was the NZ swap rates..They have instead ticked up (see interactive chart)

I wonder if Goldman Sachs are watching this area..