New Zealand quarterly employment report overview
Early Wednesday in Asia, at 22:45 GMT Tuesday world over, the global market sees the first quarter 2021 employment data from the Statistics New Zealand. Given the covid resurgence in the Asia-Pacific, coupled with the recently mixed comments from the Reserve Bank of New Zealand’s (RBNZ) bi-annual Financial Stability Review (FSR), NZD/USD traders are divided over the data and make it the key for immediate direction.
Market consensus suggests no change in the headlines Unemployment Rate of 4.9% while expecting 0.2% Employment Change versus 0.6%. Further, the Participation Rate may inch up from 70.2% to 70.3%, per forecasts.
Ahead of the data, TD Securities said,
We pencil in the Q1 unemployment rate at 4.8%, more optimistic than the RBNZ's Feb MPS (5.0%) and market forecast (4.9%). We look for employment growth to come in at 0.6% q/q (Q4:0.6%) as Stats NZ's monthly employment indicator shows higher filled jobs at the end of Q1. Business surveys have also pointed to difficulties in finding skilled labor and coupled with the minimum wage hike could add to further wage pressures in the private sector (market consensus: 0.5% q/q). Downside risk to our employment forecast could come from a slowdown in economic activity as seen from the weaker-than-expected Q4 GDP print.
How could it affect the NZD/USD?
NZD/USD recently ignored the RBNZ FSR as the bi-annual statement flashed mixed signals while staying cautiously optimistic. It should be noted that the risk-off mood and the pre-data caution also weigh on the quote of late.
Given the upbeat forecasts and mixed comments from the RBNZ FSR, the data will be important for NZD/USD sellers as virus conditions worsened in Q1, which in turn challenges the optimists. As a result, the pair traders need to closely observe the data, not only the headline figures, to get a clear direction. Herein, the Participation Rate will be the key to follow.
On the chart, NZD/USD sellers battle 21-day and 50-day SMA convergence, near 0.7150-45, to keep the reins, an upward sloping trend line from April 01, around 0.7115, also acts as the key support to watch during the quote’s further weakness. Alternatively, the 0.7200 threshold guards the kiwi pair’s short-term recovery moves.
Key Notes
NZD/USD ignores mixed RBNZ FSR ahead of New Zealand Employment
New Zealand Employment Preview: Participation rate holds the key as jobless rate seen steady
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
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.