- AUD/NZD traders await the key Aussie September labour force survey.
- AUD/NZD bulls seeking a break of prior highs while above 21-DMA.
AUD/NZD was two-way business overnight while ongoing concerns about the economic outlook amid mix messages about the US-China trade deal saw a mixed performance in the commodity complex. The cross had made a two-week high at 1.0781 the prior day before retreating to 1.0725 ahead of the New Zealand Consumer Price Index which instigated a sell-off to 1.0682 before the cross recovered back towards the prior highs.
"We expect the slowdown in global and domestic activity to continue to weigh on the NZD over coming quarters, and expect the global easing cycle to continue to drag yields lower," analysts at ANZ argued – "No one’s disputing the fact that the New Zealand economy has a little less wind in her sails. We’ve been seeing it in the leading indicators for a while; it’s now been confirmed in the hard data; and the view from the crow’s nest is that there’s a little more softening to come."
September labour force survey coming up
For the day ahead, Australia’s September labour force survey will be one to watch considering the likelihood of another RBA rate cut next month. Markets are looking for the median forecast for total employment at +15k – (If the participation rate holds at a record high 66.2%, the unemployment rate will hold at 5.3% (a 12 month high)).
With respect to the central banks, "markets are pricing 10bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.44% (RBA cash rate currently at 0.75%). Market pricing for RBNZ is for 25bp of easing on 13 November, with a terminal rate of 0.54%," according to analysts at Westpac.
Bulls got above the 21-DMA again and the prior highs are in sight. On a break of 1.0850, 1.0950 guards a look in back to the 7th August highs and the 1.10 handle.
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