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Kiwi Steady Ahead of Employment Numbers

Published May 1, 2019

The Kiwi Dollar opens marginally higher as local markets await this morning’s NZ Q1 employment data. Expectations are for a slight improvement in the unemployment rate to 4.2% compared with 4.3% the previous quarter. The risk to the NZD will be any big variance to this expected number, which could influence the timing of the next RBNZ move on interest rates. Yesterday’s business confidence data showed little change with overall confidence still fairly negative, although next month’s reading could be more positive in reaction to the government’s announcement to scrap its proposed capital gains tax policy.

All Eyes on US Fed Tomorrow Morning

Once today’s local employment data is out of the way, the next big events likely to move the NZD are U.S ISM Manufacturing PMI released at 2am this evening, followed by the much anticipated Federal Reserve Rate Decision at 6am. No change to rates is expected, but there are expectations for the FOMC statement to show an improvement in the Fed’s view on current economic conditions.

GBP Firmer as Brexit Talks Progress

The Pound surged higher overnight as reports suggested the UK Government had made meaningful progress in its talks with the opposition Labour Party.
The Euro was also firmer after positive Euro Zone data released overnight. GDP was better than expected at 1.2% for Q1, while the unemployment rate was also on the improve at 7.7% vs market expectations of 7.8%.