Citi maintains a long AUD/NZD position* after the hawkish RBNZ's stance at this week policy meeting.
"The RBNZ left is policy rate unchanged at 1.0% today as broadly expected. It was also largely in line with our expectation for today’s meeting, but the overall massage was more hawkish than we thought," Citi notes.
"The optimism will likely be priced in at first, which we suspect could be followed by disappointments.
"As we indicated in “AUDNZD Long”, we are more bullish on AUD compared to NZD, supposing bad news in Australia has been priced in already partly because of the bushfires which have forced the markets to discount pessimism. This view hasn’t changed even after today’s RBNZ and subsequent drop in AUDNZD," Citi adds.