After mBusiness confidence in NZ took a big hit last quarter, with NZIER’s index falling from 52 (20-yr high) to 32 over the quarter. This reinforces the view that the pace of economic growth may be wanning slightly, but this isn’t overly concerning. Growth is still expected to remain strong and should support the Reserve Bank of New Zealand’s (RBNZ) tightening bias (the RBNZ meets in two weeks).
NZDJPY immediately dropped to an important pivot zone following the release of the data, but the pair has since found its way back to its 200-hr SMA. The key test for NZDJPY in the near-term may come from this zone; a break of which could see the pair make a run for another support zone around 88.45. On the upside, we are eyeing resistance zones around 89.30 and 89.55 – July’s high.
Data watch:
- Japan’s current account (2350GMT) – exp. JPY417.5bn
- Japan’s Economy Watchers Sentiment (0500GMT)
- China CPI (Tuesday 0130GMT) – exp. 2.4% y/y
- NZ Business Manufacturing Index (Thursday 2230GMT)
- Japan’s core machines orders (Thursday 2350GMT)
- Japan’s Tertiary Industry Activity (Thursday 2350GMT)
- China trade balance (Thursday)
- Japan’s consumer confidence (Thursday 0500GMT)
Source: FOREX.com
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