New Zealand's Business NZ PMI improves to 46.7 versus October's 42.5

Joshua Gibson FXStreet

New Zealand's Business NZ Performance of Manufacturing Index (PMI) recovered some ground in November, printing at 46.7 compared to October's 42.5.

Key Highlights

Business NZ's November PMI recovered to 46.7, the indicator's highest reading since June. October's print of 42.5 was the lowest print for the NZ PMI since September's third quarter.

Despite NZ's PMI remaining in contraction territory below 50.0, Business NZ's Advocacy Director Catherine Beard noted that while “the key sub-index measure of Production (43.6) remains stubbornly low, New Orders (47.7) showed some improvement compared to previous months. Employment (47.9) also showed a relative improvement."

According to Business NZ Senior Economist Craig Ebert, "at the heart of the recent poor run in the PMI has been its production index. While this improved a bit in November, it was, at 43.6, almost 10 index points south of its long-term average. That’s a big undershoot, in historical context".

Market Reaction

The Kiwi is seeing strictly muted reactions to data in the early Friday Asia market session, trading just north of the 0.6200 handle.

About the Business NZ Performance of Manufacturing Index (PMI)

The Business NZ Performance of Manufacturing Index (PMI), released by Business NZ on a monthly basis, is a leading indicator gauging business activity in New Zealand’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production or employment.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the New Zealand Dollar (NZD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for NZD.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD remains bid near 1.1650 post-US ADP

Finally some respite for the risk complex see EUR/USD partially recover from the recent steep sell-off, this time hovering around the 1.1650 zone amid decent gains in a context of renewed selling pressure on the US Dollar. However, the duration and extension of this bounce should be put to the test amid the unabated tensions in the Middle East.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery comes on the back of the fresh downward bias in the Greenback amid a marginal improvement in the global sentiment and steady geopolitical effervescence.

Gold flirts with $5,200 amid safe haven demand

Gold partially fades Tuesday’s sharp pullback, regaining the $5,200 mark per troy ounce on the back of the resurgence of investors’ demand for the safe-haven space. The precious metal remains well propped up by the deterioration of the geopolitical scenario in the Middle East, while the softer tone in the US Dollar collaborates with the uptick.