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25 Jul 2014
Westpac's client flow: Net flow into NZD rolling over
FXStreet (Bali) - As Westpac notes, net flow into the Kiwi appears to be in the early stages of rolling over after surging to record highs for the history of the bank's database.
Key Quotes
"The relationship between client flow and our data pulses is unstable but the two series nevertheless show a lot of comovement over time, much as one would expect."
"For AUD, we find neither net flow nor our data pulse are particularly stretched at the moment. If anything, they have both barely commenced a sustained multi-week upswing after troughing in May/June."
"For NZD, the opposite holds true. Net flow into the currency is now rolling over after surging to record highs for the history of our database. Our NZ data pulse did not hit new highs but it nevertheless appears to be in the early stages of rolling over as well."
"Thus, whereas the flow and data atmospherics for AUD appears to be recovering from a major trough, they appear to be cresting in NZ. The complexion of the data will not of course break consistently in one direction. However, abstracting from week to week noise, prospective underlying trends in our data pulse and client flows suggest that we may be in the nascent stages of a bigger realignment in the cross."
Key Quotes
"The relationship between client flow and our data pulses is unstable but the two series nevertheless show a lot of comovement over time, much as one would expect."
"For AUD, we find neither net flow nor our data pulse are particularly stretched at the moment. If anything, they have both barely commenced a sustained multi-week upswing after troughing in May/June."
"For NZD, the opposite holds true. Net flow into the currency is now rolling over after surging to record highs for the history of our database. Our NZ data pulse did not hit new highs but it nevertheless appears to be in the early stages of rolling over as well."
"Thus, whereas the flow and data atmospherics for AUD appears to be recovering from a major trough, they appear to be cresting in NZ. The complexion of the data will not of course break consistently in one direction. However, abstracting from week to week noise, prospective underlying trends in our data pulse and client flows suggest that we may be in the nascent stages of a bigger realignment in the cross."