When is the New Zealand Q1 retail sales data and how could it affect NZD/USD?


Overview of quarterly retail sales

Early Wednesday at 22:45 GMT sees the quarterly retail sales data from the Statistics New Zealand. Despite a 25 basis points (bps) cut to the benchmark cash rate, the Reserve Bank of New Zealand (RBNZ) hasn’t stopped favoring bears, which in turn highlights the importance of each incoming data to strongly affect the Kiwi central bank’s next policy moves.

With the recently announced Retail card spending being on the downside, chances of a soft print from the headline retail sales data can’t be denied. Forecast suggests a 0.0% figure for the first quarter (Q1) 2019 retail sales compared to 1.7% prior while retail sales ex-autos, also known as core retail sales, might weaken to +0.9% from 2.0% prior.

TD Securities expect little change in the upcoming data as it said,

Real retail sales for Q1 is expected to post a reasonable +0.6% q/q (consensus: +0.6% q/q; range a head-scratching +0.2% to +1.0% q/q) after the outsized +1.7% q/q for Q4. Retail card spending was crimped by rising fuel costs and so volumes are highly unlikely to match the prior quarter.

How could it affect NZD/USD?

The NZD/USD pair is already on the back-foot amid soft data, doubts over global trade and pessimism surrounding the largest trading partners like Australia and China. As a result, any more weakness in the headline economic data could further weaken the Kiwi pair towards the south. On the contrary, the pair is less likely to gain much on the upbeat releases (except extremely strong data) as the RBNZ holds its bearish bias intact.

Technically, sustained break of 0.6500 could further drag the quote down towards October 2018 low near 0.6425 and then to January 2016 bottom around 0.6350. Alternatively, a descending trend-line from March 26 could limit immediate upside at 0.6540, a break of which can recall 0.6580 and 0.6600 back to the chart.

Key Notes

NZD/USD: Bears dominate around 0.6500, all eyes on New Zealand’s quarterly retail sales

NZD/USD technical analysis: Kiwi is under pressure near 0.6500 figure ahead of NZ Retail Sales

About New Zealand Retail Sales

The retail Sales released by the Statistics New Zealand measures the total receipts of retail stores. Quarterly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

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