The Kiwi is in for a data-light trading week after last week’s megacatalysts. Which events should you watch out for this time?
Business NZ manufacturing index (Aug 15, 11:30 pm GMT)
New Zealand doesn’t have a lot of top-tier economic reports on tap this week, so the Business NZ manufacturing index due on Thursday will likely get tons of attention.
The report came in at 51.3 for the month of June, which was higher than the 50.4 index reading that analysts had expected. New Zealand’s data calendar was also light at the time, so the better-than-expected release pushed Kiwi higher for most of the Asian session.
This week market geeks see the report printing at 51.8. Remember that Reserve Bank of New Zealand (RBNZ) members tend to pay attention to business-related reports like these. Much weaker than expected releases could fire up speculations of another RBNZ rate cut, so make sure you stick around when the report is printed!
Market risk appetite
Another week, another chance to dance to the tune of risk sentiment? Last week’s price action told us that Kiwi remains vulnerable to global trade-related headlines and huge countercurrency price action moves.
Recall that the Trump administration imposed fresh tariffs on Chinese products, branded China as a currency manipulator, pressed the Fed into weakening the dollar and cutting rates by a full percentage, AND warned that the government won’t do business with Chinese telecom giant Huawei. And that’s just last week!
This week pay close attention to potential trade or currency-related policy actions from China. So far, the world’s second-largest economy has forbidden state businesses to import American agricultural products and had let its currency weaken past the 7 yuan per dollar mark.
Will China’s government announce general stimulus measures, or will it target a couple more U.S. businesses as the trade war heats up?
Meanwhile, top-tier reports from other major economies could also affect appetite for higher-yielding currencies like the Kiwi. Uncle Sam’s CPI report, for example, could show a pick-up after hitting a four-month low in June. The U.K. is also publishing its monthly labor market data and the euro zone is printing its second GDP estimate. Don’t even think of missing these events!
Missed last week’s price action? Read NZD’s price recap for August 2 – 5!