Kiwi took the top spot among the major currencies last week. Can the bulls extend their run this week? Let’s look at its top catalysts!
Quarterly CPI report (Jul 15, 11:45 pm GMT)
Consumer prices dropped to a 1.5% growth from a year ago in Q1 2019, way lower than the 1.9% uptick seen in the previous quarter and the 1.7% increase that analysts had expected.
The quarterly reading didn’t fare much better with its 0.1% growth against traders’ expectations of a 0.3% increase. A closer look revealed that decreases in transportation and housing & utilities made up the bulk of the weaknesses.
The weak release, combined with a not-so-liquid market, accelerated the Kiwi’s intraweek downtrend and dragged it lower against its counterparts.
This week market geeks expect to see the annualized CPI clock in at 1.7% while the quarterly index is seen at 0.6%.
Remember that the Reserve Bank of New Zealand (RBNZ) chose to maintain its policies steady in June when analysts had expected a back-to-back rate cut from the central bank.
A much lower CPI reading would add to the case of another rate cut coming from the RBNZ. A better-than-expected release, on the other hand, just might extend the comdoll’s gains.
Overall market sentiment
We know from last week’s price action that Kiwi bulls love it when major central banks like the Fed all but promise a rate cut this month.
There aren’t a lot of central bank shenanigans scheduled this week, so watch the top-tier reports from other economies for cues of more easing from other major central banks.
In the meantime, keep close tabs on any and all statements from the Fed that might hint at the aggressiveness of its easing schedule.
Oh, and don’t neglect your geopolitics! Word around is that Iran is “ready for talks” with the U.S. if its sanctions are lifted. If the U.S. comes into the negotiation table, then we might see more risk-friendly moves in the markets.
Missed last week’s price action? Read NZD’s price recap for July 8 – 12!