When are NZ Trade Balance, speech from RBNZ’s Orr and how could they affect NZD/USD?


Overview

New Zealand's (NZ) economic calendar is reimbursing for the recently thin data line on Wednesday. After the bi-annual Financial Stability Report (FSR) from the Reserve Bank of New Zealand, October month trade numbers and a speech from the RBNZ’s Governor Adrian Orr are up for publishing at 21:45 and 22:00 GMT.

October month Trade Balance, Import and Exports will be immediate the catalysts to follow. Market consensus favor MoM Trade Balance to decline to $-1621M from $-1242M. The monthly figure stood at $-5.21B whereas Exports and Imports $4.47B and $5.71B respective priors.

New Zealand’s central bank met the market’s wide expectations of announcing no change to its Loan to Value Ratio (LVR) restrictions in the FSR. However, it does have the responsibility to balance the central bank’s recently hawkish statements and to manage the recovery in housing market. As a result, traders will be closely observing the comments from the RBNZ’s Governor Adrian Orr about the Financial Stability Report, in Wellington, for fresh clues.

Ahead of the event, the Australia and New Zealand Banking Group (ANZ) says, “the FSR looks like the warm-up act for the main event: the RBNZ’s final bank capital decision, due next Thursday 5 December at 12 noon.”

How could they affect NZD/USD?

While the recent tone of the RBNZ’s Orr has been quite hawkish, any disappointment could add weakness to the Kiwi. Prior to that, expectedly downbeat trade numbers might trigger the NZD/USD pair’s south-run. However, positive outcomes, which are quite likely amid the latest trade positive environment, may help the quote recover some of its latest losses.

Technically, a daily closing beyond the monthly high around 0.6470 becomes necessary for the bulls to target 0.6500 else, a two-week-old support line at 0.6400 and 21-day Exponential Moving Average (EMA) at 0.6390 will gain market attention.

Key notes

NZD/USD: A top performer on busy event calendar, testing trendline resistance

About New Zealand Trade Balance

The Trade Balance released by the Statistics New Zealand is a measure of balance amount between import and export. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. If a steady demand in exchange for exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the NZD.

About RBNZ Governor Orr’s speech

Adrian Orr will be the Governor of the Reserve Bank of New Zealand from March 2018. The Reserve Bank uses monetary policy to maintain price stability as defined in the Policy Targets Agreement (PTA). The current PTA requires the Bank to keep inflation between 1 and 3 percent on average over the medium term. The Bank implements monetary policy by setting the Official Cash Rate (OCR), which is reviewed eight times a year.

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