U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
2025 Market Outlook: Key January Events to Watch 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Urban studies: Doing research when every city is different 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
China's Refining Industry Faces Major Shakeup Amid Challenges 
US Gas Market Poised for Supercycle: Bernstein Analysts 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
Bearish NZDUSD scenarios below 0.60 if:
1) The NZ housing market slowdown becomes disorderly;
2) The NZ immigration rolls over more quickly;
3) Weaker business confidence sees firms dramatically cut hiring.
Bullish NZDUSD above 0.70 if:
1) NZ fiscal easing is accelerated;
2) Kiwis inflation outlooks begin to ratchet up quickly due to the government’s minimum wage increases.
Whereas Kiwis dollar’s (NZD) weakness has been prolonged in sympathy with high-beta FX. This led us to slightly lower our NZD forecasts last month to reflect the risk of ongoing negative news-flow relating to EM.
6m IV skews have clearly been indicating bearish risks. Hence, major downtrend continuation shouldn’t be panicked the broad-based bearish outlook amid minor rallies.
These positively skewed IVs of 6m tenors signify the hedgers’ interests to bid OTM put strikes up to 0.65 levels (refer above nutshells evidencing IV skews).
We reckon that the global risks play less favorably for NZ than they do for Australia, and the central bank has reason to be credibly dovish even as the data have outperformed some of the downside risk scenarios laid out earlier in 2018. NZD is expected to depreciate to 0.65 by end of H1’2019.
The major downtrend of the underlying spot still remains intact (refer above technical chart). While the NZDUSD trade is underwater following positive news reports on a US-China agreement. The erratic nature of news flow is one reason why we had suggested NZDUSD shorts via options in the past. 6m NZDUSD (1%) in the money put options have been advocated, in the money put option with a very strong delta will move in tandem with the underlying.
The trade projection is now out of the money but we maintain exposure given tail risks to high beta FX as noted earlier.
Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards 92 levels (which is bullish), while hourly USD spot index was at -69 (bearish) while articulating (at 08:06 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
