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Bank of America and Morgan Stanley with conflicting views on the New Zealand dollar.
Bank of America
- “Quant signals now show signs for USD upside for the first time in April, after having had persistently bearish USD signals throughout this month,”
- “Models show NZD is currently the most vulnerable G10 currency with USD about to reverse higher. Moreover, event analysis is also moderately bearish NZDUSD, as front-end skew moved the most in NZDUSD last week by more than 2% for NZD put,”
- “We remain tactically bullish on NZD/USD, best expressed via options (1m ATMF calls), and short AUD/NZD. Short-term, we think a consolidation in US yields and higher risk asset prices should benefit NZD/USD, which tends to gain on average in periods of “risk-on” Regime 4,”
- “We prefer options, though, to limit downside losses should risk assets weaken suddenly,”
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