When is the New Zealand Q2 employment data and how could it affect NZD/USD?

New Zealand quarterly employment report overview

Early Tuesday at 22:45 GMT sees the quarterly employment data from the Statistics New Zealand. Rising odds for the RBNZ’s August rate cut highlights the second quarter (Q2) 2019 unemployment rate and employment change figures for the New Zealand Dollar (NZD) traders. Additionally, participation rate and labor cost index are some other jobs indicators that are also up with the headline figures.

Market consensus favors an uptick in the unemployment rate to 4.3% from 4.2% with a likely 0.4% increase in employment change versus -0.2% prior. Further, the participation rate and labor cost index (QoQ) are both expected to rise to 70.5% and 0.7% respectively from 70.4% and 0.3% priors.

Analysts at ANZ are less optimistic about the Kiwi jobs report as they say:

Today brings NZ employment and wage data for Q2. We are expecting that the unemployment rate rose to 4.4% as prior weakness in the economy filters through. This forecast is supported by both survey indicators and job ads. Wage inflation is expected to be flat y/y.

How could it affect the NZD/USD?

Given the sluggish prints of headline economic data already painted Reserve Bank of New Zealand’s (RBNZ) rate cut, a weak employment report might not hesitate to further weaken the NZD/USD pair below key support-line. It should also be noted that an upbeat signal from the headline numbers will also be observed closely to portray the Kiwi’s near-term recovery ahead of tomorrow’s RBNZ decision.

On the chart, NZD/USD is close to ten-month-old ascending trend-line, at 0.6500, a break of which can drag the quote towards May bottom close to 0.6480 and late-October 2018 low near 0.6465. However, levels of 14-day relative strength index (RSI) highlights brighter chances for the pair pullback to July 10 low surrounding 0.6560 in a case of upbeat employment data.

Key Notes

NZD/USD: On thin ice ahead of NZ employment data

NZD/USD technical analysis: Recovers a major part of early lost ground to 0.6490-80 support area

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).