by SignalFactory · February 5, 2020 | 06:53:34 UTC
remains mildly positive near 0.6500 after New Zealand’s key employment data
release during the early Wednesday morning in Asia.
Zealand’s fourth quarter (Q4) employment data suggests the headline
Unemployment Rate declining to 4.0% from 4.2% expected and prior whereas
Employment Change slipped below 0.3% forecast to 0.0%. Further details suggest
that the Labour Cost Index matched 2.4% market consensus on YoY while rising
beyond 0.5% expectations to 0.6% on QoQ. Even so, the Participation Rate
softened to 70.1% compared to 70.4 expected and prior.
a reaction to the data, the Kiwi pair initially popped to a four-day high of 0.6501
but pulled back to 0.6487 after few minutes.
pair benefited from the RBA’s surprise optimism on Tuesday. In doing so, it
paid less attention to the broad US dollar strength and upbeat US data. The
reason could also be attributed to the broad risk recovery that pushed the US
10-year treasury yields up by eight basis points (bps) to 1.6%.
on Tuesday, New Zealand’s GDT Price Index slipped below 0.9% market forecasts
to -4.7% with the prices of Whole Milk Powder (WMP) down 6.2%. On this, analysts
at Australia and New Zealand Banking Group (ANZ) said, “The movement was
largely aligned with futures expectations and certainly not as large as some
had feared. Prior to the event, it was feared demand from Chinese buyers may
have been muted at this event, but this result shows there was still plenty of
buying interest. As expected, the later delivery contracts performed better
than the nearby contracts for WMP but the difference wasn’t particularly
forward, traders will pay close attention to the speech by the RBA’s Governor
Philip Lowe as well as China’s Caixin Manufacturing PMI for the immediate
direction. While the RBA’s Lowe might reiterate the central bank’s optimism, as
conveyed the day before, Chinese activity gauge is also likely to improve to
52.6 from 52.5. Following that, the US economic calendar will also be worth
observing as it carries the ADP Employment Change, Trade Balance and ISM
Non-Manufacturing PMI data.
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