Trial now

Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

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.