Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Clues From Kiwis
We often look to the Australian dollar as a barometer for global growth, but we can take that analysis one step further by checking in on the arguably more cyclical currency, the New Zealand dollar. It often gives us a nice leading signal on AUD/USD. With a good portion of the New Zealand economy being driven by agriculture, tourism, and international trade, the NZD acts as a nice microcosm for the global economy.
At notable turning points in these trends, we tend to see the New Zealand dollar provide a heads up before it’s reflected in the Australian dollar. Over the last few weeks, while the AUD has been making fresh lows, the NZD has been remarkably resilient, carving out higher lows.
Will this divergence resolve with AUD soon catching higher? The action from cyclicals would certainly support that outcome.
