Monday, November 16, 2015

Flows to think about in November - Westpac

FXStreet (Guatemala) - Analysts at Westpac explained that their regular monthly update covering key flow indicators for Australia and New Zealand.

Key Quotes:

"Japanese demand for A$ assets ran well below levels we expected in September. We think this could be driven by demand for JGBs asset swapped into AUD.

While our concern over Japanese demand is rising, our own offshore demand remains ongoing for now across most asset classes and maturities.

Net issuance in Semis and SSAs picked up in October, particularly Semis where several sizeable deals priced, but this was masked by number of large maturities.

Demand for A$ equity is running hot and the pipeline of A$ M&A deals suggests direct investment demand is the same.

Speculative short A$ positions have risen modestly and we think this will continue. However, our own flows show a strong improvement in appetite for AUD, concentrated mainly among the Real Money community.

Japanese demand for NZ$ debt has softened after hitting multi year highs in recent months. We think US demand is set to do the same in September.
Eurokiwi and uridashi issuance in October was again modest and activity remained subdued in NZGBs in October apart from the NZ$2bn launch via syndication of a 2033 bond.

Our NZGB investor clients remained net buyers in October while our offshore clients swung to a slightly paid position.

Leveraged traders exited a record short NZD position during September and October. Net M&A inflow into NZ is softening, but still positive."
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