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NZD Lower Ahead Of Big Week

Published October 29, 2019

The Kiwi Dollar opens the short week down from last weeks close, underperforming vs most other major currencies despite positive market sentiment and an improvement in risk appetite. The US Dollar is broadly firmer amid optimism over trade talks with China.

Brexit Extended Again

In Brexit news, Boris Johnson has agreed to the EU’s offer of a three month extension to January 31st, with the British Pound recouping some of its losses from last week. Meanwhile Johnson is expected to hold another parliamentary vote to approve a new election in December, with the Labour Party expected to abstain or vote against it.
A big week ahead including central bank interest rate decisions and major data releases from the U.S, Europe, China, and Australia.

THE WEEK AHEAD

Last week was light on data with markets largely taking direction from market sentiment changes based on Brexit and trade war developments. This week is a different story with key data events from all parts of the globe, along with central bank interest rate decisions out of the U.S, Japan, and Canada.

Thursday shapes as a particularly eventful day, and most important for economic data with the US Fed rate decision due at 7.00am NZ time, China Manufacturing Data for October at 2.00pm, and US core PCE (the Fed’s preferred measure of inflation) out later that evening, at 1.30am. Rate decisions by the Banks of Japan and Canada are also due on Thursday, as is Eurozone GDP (Q3) and CPI (for October).

Prior to Thursday, we have Australian CPI data at 1.30pm tomorrow afternoon, with inflation expected to tick slightly higher. The week finishes with US non-farm payrolls early on Saturday morning, where the unemployment rate is forecasted to rise to 3.6% (from 3.5%), with only 88k new jobs expected.

Not much on the local data front this week, however the NZD will no doubt be in for a fairly bumpy ride given the announcements and data to be released over the next few days.