You are here: Home > articles > Forex > New Zealand employment to bounce back in Q1 but may fail to lift kiwi – Forex News Preview
New Zealand employment to bounce back in Q1 but may fail to lift kiwi – Forex News Preview
April 30, 2019 3:26 pmVideo
Latest News
- Energy in Focus: What news awaits investors on Wall Street April 15, 2024
- Forecast for EUR/USD on April 15, 2024 April 15, 2024
- Forecast for GBP/USD on April 15, 2024 April 15, 2024
- Forecast for USD/JPY on April 15, 2024 April 15, 2024
- Outlook for EUR/USD on April 15. The euro is already falling for no apparent reason! April 15, 2024
- Trading plan for GBP/USD on April 15. Simple tips for beginners April 15, 2024
- Trading plan for EUR/USD on April 15. Simple tips for beginners April 15, 2024
- Euro will return to parity April 12, 2024
- Trading Signals for ETH/USD (Ethereum) for April 12-15, 2024: buy above $3,435 (3/8 Murray – 200 EMA) April 12, 2024
- EUR/USD. Analysis for April 12th. The euro falls down under the pressure of the news background April 12, 2024
- GBP/USD. Analysis for April 12th. A significant event: the pound fell below the 25-figure April 12, 2024
- Trading Signals for EUR/USD for April 12-15, 2024: buy above 1.0620 (-2/8 Murray – rebound) April 12, 2024
- GBP/USD: trading plan for the US session on April 12th (analysis of morning deals). The pound followed the euro April 12, 2024
- EUR/USD: trading plan for the US session on April 12th (analysis of morning deals). The euro continues to fall April 12, 2024
- EUR/USD and GBP/USD: Technical analysis on April 12 April 12, 2024
- EUR/USD: Dovish signals from the ECB and rising PPI April 12, 2024
- EUR/USD. April 12th. ECB meeting: confidence in rate cut increased in June April 12, 2024
- GBP/USD. April 12th. British economy continues to stagnate April 12, 2024
- Analysis and trading tips for EUR/USD on April 12 (US session) April 12, 2024
- Analysis and trading tips for USD/JPY on April 12 (US session) April 12, 2024
Labour market indicators will be published in New Zealand on Wednesday at 10:45 local time (Tuesday, 22:45 GMT), in what will be the last major release before the Reserve Bank of New Zealand’s policy meeting on May 8. With rate cut expectations running high, the New Zealand dollar is vulnerable to positive surprises in the data.
Jobs growth expected to rebound
In the prior release, the unemployment rate had unexpectedly shot higher from 4.0% to 4.3% in Q4 2018. Analysts are forecasting the jobless rate to have edged slightly lower in the first three months of 2019 to 4.2%. More importantly, jobs growth is anticipated to have accelerated to 0.5% in Q1 from just 0.1% in the previous quarter. However, the labour cost index, which measures wage growth, likely grew by 0.5% over the quarter, unchanged from the prior figure. On an annual basis, the labour cost index is expected to have risen by 2.1%, which would make it only a marginal improvement from Q4’s 2.0% rate.
Muted inflation picture
A mild improvement in employment growth is unlikely to significantly reduce rate cut bets unless it’s accompanied by substantially faster wage growth. Like most central banks, the RBNZ is combating persistently low inflation and wage growth – the 12-month CPI rate stood at just 1.5% in Q1. The subdued inflation picture prompted policymakers to turn more dovish at their March meeting. The RBNZ surprised markets when it signalled that the “the more likely direction of our next OCR move is down”.
The policy shift set the kiwi on a downtrend, driving it to near 6-month lows against the US dollar last week. A better-than-expected jobs report could provide the kiwi with a modest lift, with immediate resistance at $0.6705, near the 20-day moving average, becoming the key target. However, a weak set of numbers could push the kiwi back towards the April lows in the $0.6585 support region.
Limited scope for kiwi upside
A drop below this support in the kiwi/dollar to fresh yearly lows is possible from a very bad report, which could see investors bring forward their expectations of a rate cut to as early as the next meeting on May 8. But, on the other hand, any bright spots in the jobs figures would probably do little to convince markets that the RBNZ’s next move won’t be down.
Related Posts: