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11 Feb 2013
Forex Flash: AUD/USD should find buyers at 1.0200 this week – Westpac
According to the Westpac Strategy Team, “Ongoing local data weakness, lingering spec positioning overhang and RBA easing hints have helped produce weakness for the AUD/USD, culminating in fresh lows since October. However, with -50bp already priced by October and China data momentum intact into the lunar new year, the AUD/USD should find buyers towards 1.0200 on the week.”
In addition, 3yr bond yields appear to be in an upward sloping trend channel, which means we are now looking for tactical opportunities to sell into rallies rather than being ‘buyers on dips’.
In regards to the AU curve, the 3-10yr briefly broke higher before once again returning to its old 56-63bp range, which should hold over the coming week. Finally, in terms of AU swap spreads, “we are more comfortable receiving 3yr swap EFP though we are not expecting the 25-35bp range to break given the recent reductions in fixed rate mortgage rates which should lead to opportunistic pay side fl ows from bank balance sheets.” the team adds.
In addition, 3yr bond yields appear to be in an upward sloping trend channel, which means we are now looking for tactical opportunities to sell into rallies rather than being ‘buyers on dips’.
In regards to the AU curve, the 3-10yr briefly broke higher before once again returning to its old 56-63bp range, which should hold over the coming week. Finally, in terms of AU swap spreads, “we are more comfortable receiving 3yr swap EFP though we are not expecting the 25-35bp range to break given the recent reductions in fixed rate mortgage rates which should lead to opportunistic pay side fl ows from bank balance sheets.” the team adds.