AUD/NZD STICKS TO MODEST GAINS NEAR ONE-WEEK TOP, AROUND 1.1030 AREA POST-RBA

• AUD/NZD rallies around 45 pips intraday following the release of the upbeat Chinese PMI print.
• The RBA’s on-hold rate decision and hawkish outlook do little to provide any meaningful impetus.
• Bets for more aggressive RBNZ interest rate cuts favor bulls ahead of NZ jobs data on Wednesday.

The AUD/NZD cross reverses an Asian session dip to the 1.0990 region and rallies to a one-week top on Tuesday in reaction to the upbeat Chinese data. Spot prices stick to modest intraday gains around the 1.1030 area and move little after the Reserve Bank of Australia (RBA) announced its policy decisions. 

Data published earlier this Tuesday showed that business activity in China's services sector expanded at the fastest pace in three months during October and the Caixin/S&P Global Services PMI rose from 50.3 in September to 52. This was consistent with the official PMIs released last week and could be seen as an early sign that China's big stimulus push is helping improve business conditions, which, in turn, provides a goodish lift to the Australian Dollar (AUD). 

The New Zealand Dollar (NZD), on the other hand, continues with its relative underperformance in the wake of rising bets for more aggressive interest rate cuts by the Reserve Bank of New Zealand (RBNZ). The expectations were reaffirmed by RBNZ's semi-annual Financial Stability Report, which indicated that the economic conditions remain challenging and also warned about the impact of geopolitical tensions on the economy.