Like in the previous week, New Zealand won’t be printing any top-tier reports over the next couple of days.
Here’s a list of catalysts that might move the Kiwi instead:
China’s trade data (Jan. 14, Asian session)
In a few hours the world’s second-largest economy will print its trade numbers for the month of December.
Analysts are expecting a trade surplus of 345B CNY/$51.6B after seeing the numbers at 306B CNY/$44.7B back in November.
Export-dependent economies will be paying closer to imports, which could signal future demand strength from China.
How hard has the U.S. – China trade war hit Chinese demand so far? More importantly, will today’s numbers hint at potential trends once the holiday spike has gone down?
NZIER business confidence (Jan. 14, 9:00 pm GMT)
The quarterly report has always caused a blip or two for the Kiwi because tons of traders look to business sentiment for clues on economic activity in New Zealand.
If you recall, Kiwi took some hits back in October when the report printed unimpressive results and hinted at weak economic activity in the next quarter.
Will we see the weakness this time around? Recall that the report clocked in at -30 for Q3 2018. Significant hits or misses could cause volatility among Kiwi pairs, so make sure y’all are tuned in!
Overall risk sentimentAs mentioned below, traders got morale boosts from modest improvements seen in the U.S.-China trade negotiations.
Will the bulls sustain their momentum this week? Traders will wait on the ministerial-level talks, which could yield more details on a trade deal before the time-out expires in March.
Last Week’s Price Review
The Kiwi is the one to rule them all this week, beating out the other major currencies on rising global risk-on sentiment.
Major Market Drivers for the New Zealand Dollar
We only saw ANZ Commodity price and Building Permits data from New Zealand this week, and given that they were both negative and had little to no affect on the Kiwi, it’s likely that price action was driven by global risk sentiment and opposing currency influences.
Global risk sentiment was on the upswing this week despite weak economic data coming out from various parts of the world, most notably in China (e.g, fall in car sales and slowest factory prices rise in two years), Europe (Germany edges towards recession), and the U.S. (services sector grows at slowest pace since July).
Given the upswing in the Kiwi, it looks like traders were focused on the signs of modest progress from the U.S.-China trade talks and possibly stimulative actions from the People’s Bank of China to help push global risk sentiment and the Kiwi higher after an early week move lower.
With economic data around the globe slowing, traders are speculating that there will be a pullback on the idea that central banks will continue to tighten the loose monetary policies that have supported risk assets (like the Kiwi this week) since easy money policies were introduce after the Great Financial Crisis.
New Zealand Headlines and Economic data
- Jump in number of new NZ building consents
- ANZ World Commodity Price Index fell marginally in December