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NZD news - page 10

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New Zealand revises Q3 CPI higher


Statistics NZ has issued a corrected for its consumers price index (CPI) figures for the September 2016 quarter

  • CPI change in the September 2016 quarter is now 0.3% q/q (previously published at 0.2)
  • CPI for the year to the September 2016 quarter is 0.4% from previously published 0.2%)

October retail card spending +0.6% m/m (expected +0.4%)


New Zealand Card Spending
Retail + 0.6%
  • expected +0.4%, prev. +1.9%
  • For y/y +4.2% (prior +6.1%)
Core retail spending (excludes vehicle-related industries)
  • Up 0.3% (+2.3% in September)
Total +0.6%
prior +2.1% (revised from +2%)

RBNZ cuts rates 25 basis points, as expected


Highlights of the Nov 10, 2016 interest rate decision from the RBNZ

  • Prior was 2.00%
  • The OIS market was pricing in a 81.3% chance of a cut
  • All 17 economists surveyed by Bloomberg were forecasting a cut
  • Full text

The New Zealand dollar was more subdued on the US election than some other trades, in part due to uncertainty about the RBNZ. The daily range was 0.7265 to 0.7395 with the pair slightly off the lows shortly before the decision.

More RBNZ statement headlines:

  • Sees average OCR at 1.8% in Q1
  • Sees average OCT at 1.7% in Q2 and Q3

That's a hint at a chance of another cut but it might just be a rounding error.

  • A decline in the exchange rate is needed
  • Sees inflation hitting 2% in Q4 2018 vs Q3 2018

The minor pushback in inflation is a hint that the RBNZ doesn't see much more work to do.

  • Sees growth strong enough for mid-range inflation
  • NZD helping to generate negative inflation in tradeables         

Key headlines from the statement:

  • Monetary policy will continue to be accommodative   
  • Our current projections and assumptions indicate that policy settings, including today's easing, will see growth strong enough to have inflation settle near the middle of the target range

That final sign is the strongest sign that the RBNZ doesn't plan to cut again and that's why NZD has jumped 75 pips on the headlines.

NZ data - BusinessNZ Manufacturing PMI for October: 55.2 (prior 57.7)


New Zealand data

55.2 for the October BusinessNZ Manufacturing PMI
  • previous month 57.5, revised from 57.7
Comments from BusinessNZ's executive director for manufacturing Catherine Beard:
  • Results over most of 2016 have been in a fairly consistent zone of expansion
  • The headline result for the first 10 months of 2016 shows expansion only varying by 2.8 points, with most months seesawing between the 55 and 57 point range.
  • At this stage 2016 is shaping up as better than 2015 for the sector, although the next two months will determine the extent to which the sector can keep momentum going to provide healthy levels of expansion"
And, from  BNZ Senior Economist, Craig Ebert:
  • "although the PMI couldn't quite hang onto its relatively high level of 57.5 in September, at 55.2 in October it was still handsomely positive - certainly well above its long-term average of 53.2"

NZD/USD forecast for the week of November 14, 2016


The NZD/USD pair initially tried to rally during the course of the week, but turned around and slammed into the bottom of the uptrend in channel. Because of this, I feel that it’s only a matter of time before the buyers get involved but this is a fairly negative candle. If we can find support at the 0.70 level below, I think that the buyers could return there as well. If we break below the 0.70 level, at that point I think that the longer-term trade is probably to the downside.



New Zealand house prices, REINZ data: Median price +10.9% y/y (Oct.)


NZ national median price up 10.9% year-on-year

  • The number of sales for October 2016 fell of 9% on September & fell 14%y/y
Real Estate Institute of New Zealand (REINZ) spokesperson Bryan Thomson:
  • The national sales volumes fell by 14% in October compared to the same time last year and the number of properties for sale as measured by realestate.co.nz has fallen by almost 7,400 over the past year
  • Our data suggests that the impact of the revised LVR rules is having more of an effect on lower-priced sales compared to higher priced sales, with a surge in the percentage of sales over $1million and a noticeable decline in the number of sales below $400,000 compared to 12 months ago.    
The big news from NZ is the earthquake: Earthquake of 7.8 magnitude hits New Zealand
  • Reports of two deaths so far


source

NZD/USD Drops Below Support After Retesting Broken Channel


NZD/USD has made a notable technical break this week as the pair has fallen below a rising channel that has held the pair higher since the start of the year. A recovery attempt was met with sellers on a retest of the broken channel, and the pair has remained below horizontal resistance at 0.7110 as seen on a 4-hour chart.

The US Dollar index (DXY) continued to push higher today and is on track to post a seventh consecutive day of gains. The pair has been well bid since the US election and comments from Fed member’s this week have further built conviction for a rate hike in December. DXY is seen nearing a critical resistance level as 100.26 triggered a broader correction in the index in December, leading to the decline seen in the first half of the year. A break above the level would have DXY trading at 13-year highs.

Fed member Rosengren delivered comments indicating optimism for a December rate hike. The Fed member also expects the core PCE index to hit 2% in 2017, suggesting that a higher probability of further rate increases next year. Next to speak will be Fed member Fischer followed by Fed member Bullard.

Retail sales out of the United States were reported to rise 0.8% ahead of the estimate for a rise of 0.6% in October. The prior month was revised up to 1.0% from 0.6%. The core figure was reported to rise 0.8%, also beating expectations.

NZ traders - Stats NZ will be publishing revised release calendar on Friday


Statistics New Zealand haven been offline pretty much since the earthquake on Monday

They've a temporary web page up to keep markets informed
  • We will be publishing our revised release calendar on Friday 18 November 2016.

New Zealand - ANZ consumer confidence index for November, +3.5%

  • prior +1.6%

Statistics New Zealand plan to publish their revised release calendar today. Its been a difficult week for New Zealand after the earthquake on Monday.

More from ANZ on the consumer confidence index (in brief):
  • Consumer sentiment rose further in November, lifting 4 points to the highest level since early 2015
  • Confidence in current conditions and the future both lifted
  • The majority of responses were received prior to recent earthquakes. How confidence behaves going forward will be a key factor in determining any wider near-term economic fall-out
  • Strong levels of confidence - a key flag-bearer for growth momentum - provide the economy with resilience to deal with challenges

NZD/USD forecast for the week of November 21, 2016


The NZD/USD pair fell during the week, reaching towards the 0.70 level. If we can break down below there, I believe that the market will continue to fall from here. Any rally this point in time could be a selling opportunity as well, so I look for exhaustive candles after short-term bounces in order to sell, but we will more than likely have to find those trades off of short-term charts, not weekly charts. I have no interest in buying at this point as we have not only touched pretty significant support, we are broken down below the bottom of the uptrend channel.



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