Analysts at Westpac offered an outlook for the antipodean cross and rates as follows ... Key Quotes: "AUD/NZD 1 day: Broke below minor support at 1.0700, the next technical target being 1.0610. Helping NZD outperformance is the looming NZ Budget which is expected to be stimulatory as well as preserving a strong fiscal position. AUD/NZD 1-3 month: Higher towards 1.10. The cross remains below fair value estimates implied by interest rates, commodity prices and risk sentiment, although it is closing the gap. There’s potential for a near-term rebound in iron ore prices, given demand for steel (24 May). AU swap yields 1 day: The 3yr should open at around 1.92%, the 10yr around 2.75%. AU swap yields 1-3 month: Our RBA outlook (on hold for some time) is anchoring front end valuations. We expect 3yr swap rates to remain in a 1.9% to 2.3% range, with core inflation still below 2%. (26 Apr) NZ swap yields 1 day: NZ 2yr swap rates should open up 2bp at 2.27%, the 10yr up 3bp at 3.27%. NZ swap yields 1-3 month: The RBNZ has signalled the next cycle – a tightening one – will not start until late 2019. That will anchor the short end, although markets will not abandon their expectations for tightening as early as mid-2018 which means occasional spikes in the 2yr will be likely. The long end will continue to follow mainly US yields, which we expect to rise. That means the curve steepening trend should continue. (15 May)"