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Won Stronger, PPI Rises Again


Speculation Re: Sydney COVID Cases

KIWI: NZD was underpinned by a stronger than expected NZ Q3 labour market
report. Headline employment rose 1.1% Q/Q & 2.8% Y/Y vs. exp. 0.5% & 2.0%, with
the uptick in employment outstripping the rise in the participation rate (to
71.1% from 70.9%), which allowed the unemployment rate to fall to 3.9% vs. exp
4.4%. Private wage growth was virtually in line with expectations, slowing a
touch from Q3, although AHE was strong.
- NZD/USD added ~75 pips in the wake of the release, before the rate traded on
the back of the broader USD theme over the U.S. Midterms, last dealing at
$0.6759, back from highs of $0.6779.
- The rate breached the Aug 09 high, with bulls looking for a close above the
Aug 08 high at $0.6762. Above there the aforementioned intraday high will likely
provide initial resistance. Bears need a move below the Nov 02 high at $0.6690.
- The labour mkt release had added importance ahead of tomorrow's RBNZ decision.
Although wage growth remains ltd, the fall in the unemp. rate may lead to the
Bank tweaking its language re: the labour mkt. Rates mkts priced out a chance of
a cut in '19 on the back of the print {was 20% priced for mid-'19 prev.).
MNI London Bureau | +44 0203-865-3809 |