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 the world over, the global market sees the second quarter (Q2) 2022 employment data from Statistics New Zealand.
With the Reserve Bank of Australia’s (RBA) consecutive fourth rate lift, as well as robust inflation and hopes of tighter monetary policy from other major central banks, today’s jobs report becomes crucial for the NZD/USD traders, mainly due to the wage prices index data.
Market consensus suggests a slight reduction in the headline Unemployment Rate to 3.1% from 3.2% while the Employment Change figure is likely to increase to 0.4% from 0.1%. Further, the Participation Rate may also improve to 71.0% from 70.9% but the Labour Cost Index could rise to 3.3% QoQ from 3.1% prior.
Ahead of the data, ANZ said,
We anticipate the unemployment rate will hit a fresh record low of 2.8% in Q2 (down from 3.2% in Q1). Finding workers remains the #1 constraint facing Kiwi businesses and this situation is expected to worsen as Kiwis are attracted across the Tasman. Australia’s labor market is experiencing similar challenges to the New Zealand market but the higher wages on offer in certain sectors is expected to attract New Zealanders into some of these positions.
How could it affect the NZD/USD?
NZD/USD edges lower around 0.6250, extending the previous day’s downbeat performance led by the hawkish Fedspeak and the US-China tussles.
That said, the Kiwi pair is likely to mark a kneejerk positive reaction in case the New Zealand job numbers arrive strong, which more is likely considering the tight labor market in Auckland and higher demand from Australia. However, the NZD/USD prices may not remain firmer for long unless the data is extremely positive, mainly due to the current risk-off mood. Furthermore, the recent shift in the RBA’s language also raises doubts about the hawkish mood of the Reserve Bank of New Zealand (RBNZ) and could please sellers in case the data disappoints.
Technically, a clear downside break of the three-week-old ascending trend line, at 0.6270 by the press time, directs NZD/USD prices towards the 21-DMA support level near 0.6210 at the latest.
Key Notes
NZD/USD under pressure as US dollar resurges
New Zealand: Unemployment rate seen higher at 3.3% in Q2 2022 – TDS
About New Zealand unemployment rate and employment change
The quarterly report on New Zealand's unemployment rate and employment change is being released by 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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