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NZD: NZD Continues To Sell-Off Ahead Of RBNZ Next Week

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  • NZD/USD continues to sell-off, closing Thursday session down 0.80% at 0.6213, the pair has now lost 2.15% over the past three sessions. The weakness in the currency is due to market expectations of an upcoming 50bp interest rate cut by the RBNZ, while the  strengthening USD which is being driven by robust US employment data, and further weighed down by declining global risk appetite amid escalating geopolitical tensions in the Middle East.
  • NZ’s commodity export prices rose 1.8% m/m September, with aluminum seeing the largest increase at 4.5% followed by Horticultural at 3.3%, Dairy at 2.3% & Meat, Skins & Wool at +1.4%, according to the ANZ Commodity Price Index report.
  • NZ's filled jobs increased by 0.2% m/m in August, following a revised 0.2% decline in July. Despite this monthly gain, the overall trend has been declining since a peak of 2.396 million in March. Y/y filled jobs fell by 0.4%, led by declines in construction, administrative/support services, and hospitality sectors.
  • The pair again closed at session lows on Thursday, and broke below the 20-day EMA with eyes now on 0.6200, a break here could open a move to the 50-day EMA at 0.6183. To the upside the 20-day EMA now acts as resistance at 0.6242 is needed to retest 0.6312 (Oct 3 highs). The RSI has dropped just below 50, to 48, while the MACD indicator is now printing red bars
  • RBNZ dated OIS pricing has held steady with 44bps or a 76% chance of a 50bps cut next week and 95bps of cuts now by November, looking further out the curve pricing has cooled 5-10bps with 199bps of cuts now priced in through August.
  • The NZ-US 2yr was dropped 5bps on Thursday to now trade flat
  • Expiries: 0.6050 ($601m) Oct 9
  • The calendar is light on for the remainder of the day
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  • NZD/USD continues to sell-off, closing Thursday session down 0.80% at 0.6213, the pair has now lost 2.15% over the past three sessions. The weakness in the currency is due to market expectations of an upcoming 50bp interest rate cut by the RBNZ, while the  strengthening USD which is being driven by robust US employment data, and further weighed down by declining global risk appetite amid escalating geopolitical tensions in the Middle East.
  • NZ’s commodity export prices rose 1.8% m/m September, with aluminum seeing the largest increase at 4.5% followed by Horticultural at 3.3%, Dairy at 2.3% & Meat, Skins & Wool at +1.4%, according to the ANZ Commodity Price Index report.
  • NZ's filled jobs increased by 0.2% m/m in August, following a revised 0.2% decline in July. Despite this monthly gain, the overall trend has been declining since a peak of 2.396 million in March. Y/y filled jobs fell by 0.4%, led by declines in construction, administrative/support services, and hospitality sectors.
  • The pair again closed at session lows on Thursday, and broke below the 20-day EMA with eyes now on 0.6200, a break here could open a move to the 50-day EMA at 0.6183. To the upside the 20-day EMA now acts as resistance at 0.6242 is needed to retest 0.6312 (Oct 3 highs). The RSI has dropped just below 50, to 48, while the MACD indicator is now printing red bars
  • RBNZ dated OIS pricing has held steady with 44bps or a 76% chance of a 50bps cut next week and 95bps of cuts now by November, looking further out the curve pricing has cooled 5-10bps with 199bps of cuts now priced in through August.
  • The NZ-US 2yr was dropped 5bps on Thursday to now trade flat
  • Expiries: 0.6050 ($601m) Oct 9
  • The calendar is light on for the remainder of the day