After taking heavy hits last week, can Kiwi bulls put up a fight trading this week’s catalysts? Here’s a list of events you should prepare for:
Quarterly retail sales (May 21, 11:45 pm GMT)
Retail activity jumped by 1.7% in Q4 2018, which was way faster than the upwardly revised 0.3% growth in Q3 and the expected 0.5% uptick for the period. In fact, 1.7% is the fastest growth rate since Q1 2017!
A closer look told us that sales were particularly good for pharmaceuticals, food and beverage services, specialized food, and motor vehicles and parts.
The better-than-expected release pushed the Kiwi higher and kept it near its intraday highs until another catalyst pushed the comdoll around.
This week analysts are expecting headline retail sales to take a chill pill and slow down from 1.7% to 0.6%. The core figure, which excludes volatile items such as auto sales, is expected to grow a bit faster at 0.9% after gaining 2.0% in Q3.
I’m not seeing any other major catalyst scheduled during the trading session except Japan’s trade balance and core machinery orders, so it’s likely that significant reactions to the report would be sustained for at least a coupla hours.
Trade balance (May 23, 11:45 pm GMT)
Kiwi bulls saw a reason to celebrate last month when New Zealand clocked in a 922M NZD trade surplus in March, higher than the 151M NZD deficit seen in the same month last year and the 131M NZD surplus expected by market geeks. Heck, it’s the second-largest trade surplus EVER!
Turned out, exports had jumped by a whopping 18.7% from a year ago, as sales of milk powder and butter & cheese popped higher. Meanwhile, imports had slipped by 3.5% during the same period thanks to purchases of petroleum and vehicles weakened.
Will the bulls celebrate another good month for the trade balance report? After last month’s strong release, analysts now see the surplus slowing down to 400M NZD in April.
Like in the retail sales release, there are also no other major data scheduled around the trade balance report. That means upside or downside surprises will likely affect the Kiwi’s price action for most of the trading session!
Missed last week’s price action? Read NZD’s price recap for (May 13 – 17)!