Free Trial
AUSSIE BONDS

Holding Cheaper

LOOK AHEAD

UK Timeline of Key Events (Times BST)

JGBS

Curve Runs Steeper

LOOK AHEAD

Eurozone Timeline of Key Events (Times BST)

US TSYS

Little Changed In Asia

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Kiwi Lags High-Beta Peers, Jobs Market Report Under Microscope

NZD

The kiwi dollar lagged its commodity-tied peers on Wednesday, yet NZD/USD eked out some gains. The reaction to New Zealand's latest labour force survey may have helped keep a lid on the NZD. Otherwise, the pair clung to the coattails of the BBDXY index.

  • New Zealand's jobs report was mixed, even as the NZD went offered in initial reaction. The unemployment rate unexpectedly ticked away from record lows, which was driven by weak underlying data. Still, the labour market remains extremely tight, with strong outcomes for labour cost inflation raising concerns over the risk of a wage-price spiral.
  • The amount of tightening priced for the August meeting of the RBNZ's Monetary Policy Committee slipped just 3bp as participants parsed the labour market report. The Big 4 kiwi banks have all emphasised upbeat wage figures, with Westpac pushing their forecast peak for the OCR to 4.0% from 3.5%.
  • Resilient risk appetite supported high-beta FX later in the day, as equity markets in Europe & the U.S. saw benchmark indices creep higher. Commodity markets were mixed, with the aggregate BBG Commodity Index virtually unchanged on the day.
  • The improvement in risk backdrop came on the back of better than expected data prints out of the U.S. as well as the removal of the immediate risk of a forceful Chinese retaliation for U.S. House Speaker's visit to Taiwan.
  • NZD/USD trades at $0.6271, little changed on the day. Topside focus falls on Aug 1 high of $0.6353, a break here would expose Jun 16 high of $0.6396. Conversely, bears need a sell-off past Jul 14 low of $0.6061 to jump back into the driving seat.

Fig. 1. NZD/USD vs. BBDXY Index (inversed)

281 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

The kiwi dollar lagged its commodity-tied peers on Wednesday, yet NZD/USD eked out some gains. The reaction to New Zealand's latest labour force survey may have helped keep a lid on the NZD. Otherwise, the pair clung to the coattails of the BBDXY index.

  • New Zealand's jobs report was mixed, even as the NZD went offered in initial reaction. The unemployment rate unexpectedly ticked away from record lows, which was driven by weak underlying data. Still, the labour market remains extremely tight, with strong outcomes for labour cost inflation raising concerns over the risk of a wage-price spiral.
  • The amount of tightening priced for the August meeting of the RBNZ's Monetary Policy Committee slipped just 3bp as participants parsed the labour market report. The Big 4 kiwi banks have all emphasised upbeat wage figures, with Westpac pushing their forecast peak for the OCR to 4.0% from 3.5%.
  • Resilient risk appetite supported high-beta FX later in the day, as equity markets in Europe & the U.S. saw benchmark indices creep higher. Commodity markets were mixed, with the aggregate BBG Commodity Index virtually unchanged on the day.
  • The improvement in risk backdrop came on the back of better than expected data prints out of the U.S. as well as the removal of the immediate risk of a forceful Chinese retaliation for U.S. House Speaker's visit to Taiwan.
  • NZD/USD trades at $0.6271, little changed on the day. Topside focus falls on Aug 1 high of $0.6353, a break here would expose Jun 16 high of $0.6396. Conversely, bears need a sell-off past Jul 14 low of $0.6061 to jump back into the driving seat.

Fig. 1. NZD/USD vs. BBDXY Index (inversed)