Kiwi Rallies On Better Employment Data And RBNZ Comments

Today’s Economic events

Australia AIG services index 48.4 vs. 46.3 previously

BoJ releases monetary policy meeting minutes

RBNZ Governor Wheeler speech

Australia building approvals m/m 9.20% vs. 4.80%

Australia trade balance -3.54Bn vs. -2.45bn

China Caixin services PMI 52.4 vs. 50.5

BoJ Gov. Kuroda speech

Japan consumer confidence 42.5 vs. 43.8

Spain services PMI 54.6 vs. 54.6

Italy services PMI 53.6 vs. 54.2

France services PMI 50.3 vs. 50.6

German services PMI 55 vs. 55.4

Eurozone services PMI 53.6 vs. 53.6

UK services PMI 55.6 vs. 55.4

Italy prelim CPI m/m -0.20% vs. -0.10%

Eurozone retail sales m/m 0.30% vs. 0.40%

ADP private payrolls 205k vs. 193k

Coming up

US Final services PMI

US ISM non-manufacturing PMI

US Crude Oil inventories

The Yen continued to gain momentum as Oil prices declined strongly yesterday pulling down the equity markets, leading to a risk aversion. The Yen strengthened across the board until BoJ’s Kuroda commented that the BoJ had ample room for further monetary policy easing, which managed to help sustain the gains in the Yen. However by NY open, the Yen was seen gaining strength yet again. USD/JPY is currently down -0.57% for the day after posting a session high to 119.965. The Asian equity markets all closed lower with the Nikkei225 down -3.15% for the day while the Shanghai Composite lost -0.35% on the day.

The Kiwi touched a 3-week high this morning as the New Zealand quarterly employment report came out better than expected and RBNZ Governor Wheeler’s speech. The Kiwi shrugged off the GDT price index data which fell -7.40%. The unemployment rate fell to 5.30%, against expectations of an increase to 6.10% from 6.0% recorded in the previous quarter. The quarterly employment change also increased by a modest 0.90%, beating estimates of 0.80%. However, hourly earnings for the quarter rose less than expected at 0.20%, falling below estimates of 0.50%.

A few hours later, RBNZ Governor Wheeler’s comments hit the wires. He noted that “inflation does not need to be within the 1.0 – 3.0% target range” while adding that “Low Oil prices are recognized as one of the factors which could cause inflation to fall outside the target band“.