Market outllooks for antipodeans: bulls being capped - Westpac

Analysts at Westpac offered their market outlooks for the antipodeans. 

Key Quotes:

"AUD/USD 1 day:  Capped again in front of 0.7700 and again likely to be tight within 0.7600-0.7700 range

AUD/USD 1-3 month: While further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there’s a case for a correction towards 0.74 if the Fed tightens in December as we expect. (13 Sep)

NZD/USD 1 day: After faltering at 0.7300-30 again, slippage to test key 0.7215-35 area keeps NZD defensive.

NZD/USD 1-3 month:  During the month ahead another probe above 0.75 is possible, driven by good NZ economic news, a still-vulnerable US dollar, and yield-chasing inflows. By year end, there’s a case for a correction towards 0.70 if the Fed tightens in December as we expect. (13 Sep)

AUD/NZD 1 day: Should find support in the 1.0480-1.0500 zone.

AUD/NZD 1-3 month: Risks of further losses into the 1.01-1.02 zone remain. The 1.06 target seems inevitable now with the cross pushing towards fair value implied by interest rates, commodity prices and risk sentiment. (29 Sep)

AU swap yields 1 day: The 2yr and 10yr should open a touch lower, again led by global yield declines, sub 1.68% and 2.11%

AU swap yields 1-3 month: If the RBA sits tight at 1.5% during the remainder of this year the 2yr should eventually find a base around 1.60%. However the main risk is that markets continue to price in a sub-1.5% cash rate. (15 Aug)

NZ swap yields 1 day: NZ swap rates should also open -1bp lower testing 2.00% in 2yr and 10yr 2.47%.

NZ swap yields 1-3 month: Slightly lower. The OCR is likely to be cut to 1.75% in November. That should result in a 2yr swap rate of around 1.90%, although the risk is it could be lower if markets expect a 1.5% terminal OCR. (15 Aug)."