New Zealand quarterly employment report overview
Early Wednesday in Asia, at 22:45 GMT Tuesday world over, the global market sees the quarterly employment data from Statistics New Zealand.
Despite including only a partial lockdown period, the first quarter (Q1) employment data will be the key for New Zealand dollar (NZD) traders as it will reflect the severity of job losses due to the coronavirus (COVID-19). It’s worth mentioning that the early indicators have been downbeat and the RBNZ stays ready to act. With the monetary policy meeting scheduled during next week, the data could offer an excuse for Mr. Orr and the company to sound dovish.
Market consensus favors an uptick in the unemployment rate to 4.3% from 4.0% with a likely -0.3% figures of employment change versus 0.0% prior. Further, the participation rate and labor cost index (QoQ) are both expected to weaken to 69.9% and 0.4% respectively from 70.1% and 0.6% priors.
Analysts at Westpac rely on early indicators to expect downbeat outcome:
Businesses are also shedding workers. Next Wednesday’s labor market report, covering the March quarter, will capture only a fraction of the lockdown period. We expect a small drop in employment for the March quarter, and a rise in the unemployment rate to 4.3%. We expect a 0.5% increase in labor costs in the March quarter. That would take annual private-sector wage growth to 2.5%, the fastest pace since 2009. However, we already know that the labor market has taken a further step down in April, with the number of people on jobseeker benefits rising to 175,000, up sharply from 145,000 in March.
On the other hand, TD Securities mention the partial inclusion lockdown in its preview:
Markets are looking for an increase in the unemployment rate to 4.4% in 20Q1 from 4.0% in 19Q4. Employment is expected to fall by 0.2% q/q, while wages should rise by 0.5% q/q. New Zealand began it's level 4 nationwide lockdown on 25 March, so the full extent of the COVID-19 shock will not be reflected in employment data just yet.
How could it affect the NZD/USD?
With the recent comments from the Reserve Bank of New Zealand (RBNZ) citing no uniformity of the pandemic impact across the economy, the employment data will be closely watched for fresh impulse. The early indicators, namely the number of people on jobseeker benefits, recently surged and indicate the downbeat outcome. However, the period of the survey includes only a part of the lockdown and hence surprises can’t be ruled out. Hence, a mildly better than expected figures can offer additional short-term strength while the weak outcome might not refrain from extending the latest pullback.
On the chart, a confluence of 50-day SMA and an ascending trend line since March 23, 2020, seems to limit the pair’s immediate downside around 0.6035/40, a break of which can recall April 23 low of 0.5910. Meanwhile, buyers are less likely to be impressed unless witnessing a figure beyond April top of 0.6176.
Key Notes
New Zealand Employment Preview: A positive surprise?
NZD/USD pares early gains, turns flat near 0.6050
RBNZ sees some sectors more heavily affected, such as tourism – Reuters
About New Zealand unemployment rate and employment change
The quarterly report on New Zealand unemployment rate and employment change is being released by the 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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: Slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.