Kiwi Tops G10 Pile As New Zealand Averts Technical Recession

The kiwi dollar turned bid as New Zealand's Q2 GDP growth printed at +1.7% Q/Q after an unrevised 0.2% contraction recorded in Q1. The sequential outturn exceeded the median estimate of +1.0% but falling slightly short of the RBNZ's +1.8% projection. The short-end of NZGB yield curve remains slightly elevated in the wake of the release, with the long-end quickly retracing the reaction move. Rate-hike pricing for next month's RBNZ monetary policy meeting remains unchanged, but the ASB lifted their terminal OCR level forecast by 25bp to 4.25%.

• Spot NZD/USD sits a dozen pips higher on the day after failing to stage a convincing break of yesterday's high. AUD/NZD has shed some 20 pips, taking its cue from the move in Australia/New Zealand 2-Year swap spread.
• Volatility across the rest of the G10 bloc has been meagre, with most major crosses holding tight ranges. The yen has stabilised after Wednesday's rally driven by the perception of rising FX intervention risk.
• Australian labour market report headlines the regional data docket during the remainder of the day. Employment is expected to rise by 35k for August with the unemployment rate steady at 3.4% (series low).
• After Asia-Pac hours, focus will turn to U.S. advance retail sales, industrial output, Empire M'fing Survey, Philly Fed Business Outlook & initial jobless claims. ECB's de Guindos and Centeno will speak at conference events.