Positive economic updates from New Zealand early in the week eventually gave way to continued RBNZ rate cut expectations and geopolitical risk
New Zealand Headlines and Economic data
- Global dairy price index falls -3.8%
- The broad rally in Kiwi pairs during the U.S. trading session was likely a result of rising global risk sentiment after ECB President Mario Draghi signals the possibility of stimulus coming, and possibly on the improving U.S.-China trade story after Trump says he and China’s Xi spoke, and that they will have ‘extended meeting next week’ at G-20
- New Zealand Q1 Current Account Deficit NZ$2.6 Billion, lower than the NZ$3.256 previous shortfall
- New Zealand first-quarter GDP growth steady, but soft underbelly keeps more rate cuts on table – broad rally after what was an update that came in basically as expected at 0.6% quarterly growth, but we guess that avoiding a slowdown is probably the best you can expect at this point and enough for traders to buy up some Kiwis. But it looks like if that was the case, it didn’t last too long as Kiwi sentiment soured on rate cut expectations and geopolitical risks.
- A near uniform broad turn lower during the Asia session, likely on global risk aversion sentiment rising after reports of Iran shooting down a US drone aircraft