The NZD trades at similar levels seen at yesterday’s open. Markets patiently await key data announcements out later in the week including our local inflation report due tomorrow morning.
NZ Service Sector Growth Falls to 6-Year Low
New Zealand’s services sector grew at its slowest pace since December 2012, potentially signaling a slowdown in the economy. The BNZ Business NZ’s seasonally adjusted Performance of Manufacturing Index (PMI) fell to 51.9 from 53.47 in the month prior – the lowest level of activity recorded since mid-2018. A reading above 50 indicates an expansion, anything below that threshold indicates a contraction.
Trump Takes Another Swipe at Fed
President Donald Trump said the Federal Reserve has held back the stock market and the economy, claiming that the stock market and GDP would be improved if the Fed had done its job properly. Fed Chair Jerome Powell defended the institution’s independence from political interference last week, while ECB’s Mario Draghi also voiced concerns about the central bank’s independence.
NZ Inflation Data in Focus
New Zealand’s inflation report is released tomorrow morning at 10.45am. Economists are forecasting a price rise of 0.3% for the first quarter of 2019, for an annual increase of 1.7%. Both are above the RBNZ’s own forecasts of 0.2% quarterly rise and 1.6% annual rise. If data misses expectations, this should support the RBNZ’s recent dovish sentiment, with the potential for a rate cut when they next meet on 8th May.
The Reserve Bank of Australia (RBA) meeting minutes will be released today at 1.30pm, ahead of Thursday’s employment data.
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