Dismal picture painted by the latest NZ........>

KIWI: Dismal picture painted by the latest NZ labour market report sent the kiwi

lower across the G10 currency board. Although the headline unemployment rate

fell to 4.2% from 4.3%, this was due to a decline in participation rate, as

employment change moved into negative territory on a Q/Q basis. Wage data also

provided disappointment. NZD was the weakest G10 currency as a result.

- NZD/USD spiked to the session low of $0.6629 before erasing some of the losses

and trading either side of $0.6650 through the rest of the Asia-Pac session. The

rate last deals at $0.6651, 24 pips lower on the day.

- Worth noting BBG WIRP tool shows that markets are pricing in a 60% chance of a

25bp rate cut by the RBNZ during its MonPol meeting scheduled for next week. The

perceived odds of a cut were at 39% before the jobs data.

- Friday's low of $0.6617 provides the initial bearish target, followed by the

lower 1.0% 10-DMA envelope at $0.6591. Conversely, a recovery towards the down

trendline resistance from the Mar 26 high, which comes in at $0.6683, would

allow bulls to regain some poise. 

- NZ building approvals come out tomorrow.