When is the New Zealand Q2 employment data and how could it affect NZD/USD?
|New Zealand quarterly employment report overview
Early Wednesday in Asia, at 22:45 GMT Tuesday world over, the global market sees the quarterly employment data from Statistics New Zealand.
While including the coronavirus (COVID-19) led lockdown period, the second-quarter employment data will be the key for New Zealand dollar (NZD) traders as it will reflect the severity of job losses and reflect how strongly the Kiwi policymakers battled the pandemic. It’s worth mentioning that the early indicators are less worrisome but the RBNZ follows the global fashion while showing the readiness to act. With the monetary policy meeting scheduled during next week, the data could offer an excuse for Mr. Orr and the company to sound dovish.
Market consensus favors an uptick in the unemployment rate to 5.8% from 4.2% with a likely -2.0% figures of employment change versus 0.7% prior. Further, the Participation Rate and Labor Cost Index (YoY) are both expected to weaken to 69.8% and 1.9% respectively from 70.4% and 2.4% priors.
Analyst at the Australia and New Zealand Banking Group (ANZ) say,
Jobs are starting to become more vulnerable as the economic impact of COVID-19 impacts business profitability and confidence to hire staff. Today we get a glance at New Zealand’s (NZ) labor market situation with unemployment expected to lift to 5.7%.
How could it affect the NZD/USD?
Considering the virus flare-up in the largest customer Australia, coupled with the recent run of dovish remarks from the global monetary policymakers, NZD/USD traders will closely observe today’s employment data to forecast next week’s RBNZ moves. Even if New Zealand is considered the strongest defender to the virus, any disappointment from the key employment data will push RBNZ towards softening its stand. Though, a positive surprise will be enough for the kiwi pair to escalate the recent run-up.
On the chart, unless breaking below an ascending trend line from March 19, at 0.6545 now, bulls are less likely to relinquish their controls over the quote. However, the fresh wave of buying needs confirmation from a sustained rise past-0.7700 to challenge the yearly top near 0.7740 and December 31, 2019 peak close to 0.6755/60.
Key Notes
New Zealand Q2 Employment Preview: Aggressive jump in unemployment?
NZD/USD moves sideways around 0.6600 ahead of key New Zealand jobs report
About New Zealand unemployment rate and employment change
The quarterly report on the New Zealand unemployment rate and employment change is being released by the Statistics New Zealand.
The unemployment rate is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand labor market. As a result, a rise leads to weaken the New Zealand economy. A decrease of the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish).
On the other hand, employment change 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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