AU10y-NZ10y
The Aussie 10 year and New Zealand 10 year spread has dived lower again. This is in keeping with the divergent outlook between the RBA and the RBNZ. A puzzle over the last two weeks has been NZD weakness despite a more hawkish tilt from the RBNZ. This has made the AUDNZD a pain to trade/
However, it now looks like the bond yield spread dipping will drag this pair lower from major resistance. Look out below. Remember the bond yield spread is a kind of ‘relative performance proxy’ for each economy. When the bond yield spreads dip, so too does the price. Just put the quote bond first when plotting the spread , in this case AU10Y.
This article was originally published by Forexlive.com. Read the original article here.