Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The kiwi consolidates its advantage over G10 peers after getting a fillip from pretty stellar Q2 jobs data, which saw breakdown figures beat expectations virtually across the board. The unemployment rate dropped to 4.0% (BBG est. was 4.4%) from the revised 4.6% recorded in Q1 on the back of a stronger than expected surge in employment. In May MPS, the RBNZ did not expect average unemployment to reach 4.0% over the forecast horizon through 2023. Both underemployment and underutilisation moderated, while wage growth was faster than expected, suggesting that demand-side inflationary pressure continues to mount.
- As would be expected, hawkish RBNZ repricing resumed, with the OIS strip now fully pricing a 25bp OCR hike at the August meeting. Tightening bets seen after the release pushed NZD/USD higher. The rate topped out at $0.7044 and last sits +22 pips at $0.7039. Familiar technical picture are still in play, albeit the rate almost tested resistance from Jul 15 high of $0.7045.
- AUD/NZD has taken a dip, last trades -32 pips at NZ$1.0508, after printing its worst level since Dec 3, 2020. Bearish focus turns to a key cycle high located at NZ$1.0418, where the pair bottomed out on Dec 1, 2020.
- NZD/JPY last seen +22 pips at Y76.74. Further gains past Jul 29 high of Y76.89 would clear the way to Jul 26 high of Y77.31. Bears look for a pullback under the nearby 200-DMA, which intersects at Y76.13.
Fig. 1: New Zealand Unemployment Rate (%)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.