New Zealand Q2 s/adj jobs growth -0.4 pct QoQ (Reuters poll -2.0 pct)
|We get a glance at NZ’s labour market today as follows:
- NZ Q2 s/adj jobs growth -0.4 pct QoQ (Reuters poll -2.0 pct).
- NZ Q2 s/adj unemployment rate 4.0 pct (Reuters poll 5.8 pct).
- NZ Q2 participation rate 69.7 pct (Reuters poll 69.8 pct).
- NZ Q2 lci private sector wages (ex-o'time) +0.2 pct on pvs qtr (Reuters poll +0.3 pct).
- NZ Q2 lci private sector wages (ex-o'time) +1.8 pct on year ago (Reuters poll +1.9 pct).
NZD/USD update
NZD has been holding steady ahead of next week’s MPS, which could be problematic for the bulls. However, today's data has given it a nice boost for early Asia, rallying from 0.6621 to a high of 0.6644.
Meanwhile, the NZD has settled into a new “comfort zone” just north of 0.66.
While it remains elevated, it is struggling on crosses – even against the AUD after the resumption of QE there and the Victorian virus flare up.
We expect the RBNZ to be very dovish next week and to keep harder hitting unconventional policy options including negative rates and foreign asset purchases on the table, all of which speaks to strong headwinds for the NZD .
Technically the NZD’s key day reversal on Friday was ominous and points to a move lower but some catalyst is needed to speed things up as the USD recovery falters.
Analysts at ANZ Bank explained, adding that that jobs are starting to become more vulnerable as the economic impact of COVID-19 impacts business profitability and confidence to hire staff.
Additional information in the jobs data
New Zealand stats says hours worked fell a record 10.3 percent in q2 and the number of people not in the labour force rose 37,000, while underutilisation rose from 10.4% to 12.0%, largest quarterly rise since the series began.
Description
The Employment Change released by the Statistics New Zealand is a measure of the change in the number of employed people in New Zealand. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. A high reading is seen as positive (or bullish) for the NZ dollar, while a low reading is seen as negative (or bearish).
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