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May 21 - 02:55 PM

NZD: Next Week RBNZ May Trigger A Spike In AUD/NZD; A Good Opportunity To Sell - Credit Suisse

By eFXdata  —  May 21 - 01:30 PM

Credit Suisse discusses NZD outlook and likes selling AUD/NZD on rallies.

"Markets expect the RBNZ to hike faster and more aggressively than the RBA: while we don’t disagree with the view in the medium-term, we see a risk that the upcoming New Zealand budget on 20 May and the RBNZ rate decision on 25 May might trigger a near-term downgrade in RBNZ tightening expectations, and a spike in AUDNZD," CS notes. 

"As we’ve favoured selling spikes in AUDNZD, we recommend a 3m expiry AUDNZD put struck at 1.0650 with a knock-in barrier at 1.0820 as a way to leverage near-term disappointment risks in order to gain exposure to AUDNZD downside from a more attractive level," CS adds. 

Source:
Credit Suisse Research/Market Commentary

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