- NZD/USD has dumped on the NZ jobs data where both employment change and unemployment higher than estimates.
- Markets traded overnight with an upbeat tone due the reported progress in NAFTA talks on motor vehicles and a detente in US/China trade tensions.
- Traders now await the Australian and Chinese PMIs for July.
NZD/USD had been in consolidation for the best part overnight trade but has dumped on the NZ Q2 Labour Market Statistics from the 0.6820s to 0.6801, a few pips shy of the overnight low.
The data arrived as follows:
New Zealand Unemployment Rate ticks higher, mixes with positive Employment figures
- Unemployment rate: 4.5% vs the expected 4.4%, prior was 4.4%.
- Employment change q/q: 0.5% vs the expected 0.4%, prior was 0.6% for the y/y, comes in at 3.7% (expected was 3.6%, prior 3.1%).
- Participation rate: 70.9% (expected 70.8%, prior was 70.8%)
- Average hourly earnings: 0.2% q/q (expected 1.0%, prior was 1.1%)
- Private wages including overtime: expected 0.6%, prior was 0.3%
- Private wages excluding overtime: 0.6% q/q (expected 0.%, prior was 0.3%)
- Labour Cost Index: For the q/q, comes in at +0.6% (expected was 0.6%, previous was 0.3%) y/y is +2.1% (estimates centred on 2.1%, previous 1.9%)
Meanwhile, there had been progress in NAFTA talks on motor vehicles and a detente in US/China trade tensions. Also, Bloomberg came with a report that U.S. and China would seek to restart talks to defuse a trade war, citing sources which were helping the North American equities along overnight.
So far, the 0.68 handle is holding up but weak business sentiment is a reminder that the NZ economy is far from healthy – according to analysts at ANZ.
If bears keep up the pressure, below the 0.68 handle, key support is located at 0.6720 while a break to the downside below the 10 and 21-D SMAs opens 0.6720 and then 0.6680. On the upside, resistance remains located at 0.6860. A break of 0.6920, the June highs, will come into focus on a follow through beyond 0.6860. The 200-month moving average resistance at 0.7009 is the next key lev
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