AUD/NZD bulls in control, NZD the under performer ahead of RBNZ

• AUD/NZD holding at the highs for early Asia with a focus on the RBNZ. 
• AUD/NZD looking for a test through 1.07 the figure. 

AUD/NZD rose from 1.0645 to 1.0675 overnight, holding at the highs for early Asia and flat for the day so far. It's been a relatively quiet start fo the week, with both Europe and the US sessions mixed as investors mulled the prospects of governments relaxing lockdown measures. 

Risks of opening too soon

With respect to the outlook for opening up the economy in the face of a health risk, using publicly available data, MIT had used machine learning to model what relaxing global lockdown rules could do to COVID-19 cases.

The study concluded that by “relaxing quarantine measures too soon", it predicted that the consequences would be far more "catastrophic,” according to model developer and MIT mechanical engineering professor George Barbastathis. This was when compared to a similar second-wave resurgence that occurred in Singapore after it began relaxing its own measures too early.

The underperformer of the two had been NZD ahead of the RBNZ

Meanwhile, the underperformer of the two had been NZD which fell from 0.6156 to 0.6075. Markets know that the Reserve Bank of New Zealand needs to do more and this week will likely see more QE which is expected to be roughly doubled.

Analysts at ANZ Bank explained that they expect "NZGB issuance for 2020/21 to be lifted to a record $45bn pace, but the impact of this supply will be more than offset by a doubling of the QE programme to $60bn."

At the same time, if there is any mention of negative rates being a real possibility and should it be implied that it could be within 12 months, then the bird could really take a hit. AUD/NZD will be looking at territories above 1.07 the figure with prospects of a test above 1.0750 in such a scenario. 

AUD/NZD levels