New Zealand's Gross Domestic Product (sa) arrived -1.0% QoQ vs the expected 0.2%.
GDP for the year was -0.9% vs the expected 0.5% and prior 0.4%.
The data, while a downside surprise, is potentially less impactful considering policymakers are unlikely to be swayed much by the Q4 release due to covid and forward-looking performance.
''Our expectation is that 2021 is going to be a broadly sideways year for economic activity, as some industries struggle with capacity constraints and others remain suppressed on the back of the closed border,'' analysts at ANZ said.
''Vaccine efficacy and rollout, and the persistence of housing-induced domestic momentum from here, are arguably more important than how the economy capped off 2020,'' the analysts added.
''We know the recovery from lockdown has been impressive but that significant headwinds and uncertainty remain. The annual current account deficit (released the day before GDP)is expected to remain stable as a share of GDP (0.8%).''
Nonetheless, NZD/USD is under pressure.
15-min chart
As per the prior analysis, NZD/USD Price Analysis: Bears have eyes on 50% mean reversion, the kiwi is under pressure following the Fed's bid earlier in the day during the New York session.
A retracement can be expected due to the miss in the GDP and the above chart marks out the structure of the 15-min market.
A 50% mean reversion aligns with prior resistance that would be expected to act as a temporary support target.
Description of Gross Domestic Product
The Gross Domestic Product released by the Statistics New Zealand is a measure of the total value of all goods and services produced by New Zealand. The GDP is considered as a broad measure of New Zealand economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the NZD, while a falling trend is seen as negative (or bearish) for the NZD.
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