Will Kiwi climb from the bottom of the forex heap and gain pips against its counterparts this week? Here are the potential catalysts you should watch out for.
Quarterly CPI report (Jan. 22, 10:45 pm GMT)
A 19% jump in petrol prices pushed New Zealand’s consumer prices 1.9% higher from a year ago in Q3 2018, which not only beat expectations of a 1.7% increase but also marked the fastest increase in four quarters.
This week, analysts expect to see a flat quarterly reading (down from 0.9%) in Q4 2018. Meanwhile, the annualized release is seen at 1.8%, also lower than the 1.9% print we saw back in October.
As for the details, many expect tradable inflation (inflation of goods and services than can easily be substituted by imported alternatives) to dip by another 0.8% in the quarter while non-tradable inflation is expected to gain 0.4%.
If the numbers come in at around mid-point of the Reserve Bank of New Zealand (RBNZ)’s inflation target as market geeks are expecting, then the central bank will likely be comfortable keeping its policies steady for a while yet.
China’s data dump
In a few minutes the world’s second-largest economy will publish a bunch of top-tier reports.
The GDP data is definitely worth watching, though industrial production, retail sales, and fixed asset investment reports will also give clues on how hard China’s activities have taken hits since its trade war with the U.S.
New Zealand ships A LOT of its export products to China, so significant hits or misses could affect the Kiwi’s price action today. Keep your eyes glued to the tube, will ya?
Overall risk sentiment
We know from the weekly review (which I’m sure you’ll read if you haven’t yet) that Kiwi’s price action can take its cues from global risk sentiment.
The return of government employees from the MLK holiday will likely bring focus back to the U.S. government shutdown this week. Not only that, but China’s data dump could also bring market attention back to the U.S.-China trade war.
Watch your charts closely in case our comdoll starts taking cues from risk sentiment along with other high-yielding currencies!
Missed last week’s price action? Read NZD’s price recap for Jan. 14 – 18!