AUD, NZD, CAD
Data Review
Australia
- Employment Change -3.9k vs. 15.0k Expected
- Unemployment Rate 5.6% vs. 5.7% Expected
- Full Time Employment Change 11.5k vs. -46.1k Prior
- Part Time Employment Change -15.4k vs. 69.6k Prior
- Chinese Industrial Production (YoY) (AUG) 6.3% vs. 6.2% Expected
- Chinese Retail Sales (YoY) (AUG) 10.6% vs. 10.2% Expected
New Zealand
- Current Account Balance (2Q) -0.945b vs. -0.295b Expected
- PMI Manufacturing 55.1 vs. 55.5 Prior
- GDP (QoQ) (2Q) 0.9% vs. 1.1% Expected
Canada
- No Data
Data Preview
Australia
- RBA September Meeting Minutes- Likely to be neutral but cautious
New Zealand
- PMI Services- Potential for downside surprise given lower manufacturing PMI
- RBNZ Official Cash Rate- Likely to keep door open to easing
Canada
- Retail Sales and CPI- CPI may be weaker because of lower price component on IVEY
Key Levels
- Support AUD .7400 NZD .7200 CAD 1.3000
- Resistance AUD .7600 NZD .7400 CAD 1.3300
The third monetary policy announcement will be from the Reserve Bank of New Zealand. Unlike the U.S. and Japan, New Zealand’s economy has been more balanced since their last meeting. We’ve seen both improvements and deterioration with dairy prices rising and GDP growth accelerating. Manufacturing activity slowed but only modestly. Recent comments from RBNZ officials have been optimistic but when the central bank last met, they said they “will” ease further. The central bank lowered rates by 25bp in August, which was less than investors anticipated. No rate cut is expected this coming week but continued dovishness could lead to losses for NZD.
The Australian dollar was unfazed by last week’s disappointing employment numbers and in the coming week we only have the minutes from the last Reserve Bank of Australia meeting scheduled for release. If you recall, the RBA statement was relatively neutral with the central bank saying “recent data suggest that overall growth is continuing, despite a very large decline in business investment, helped by growth in other areas of domestic demand and exports. Labour market indicators continue to be somewhat mixed, but suggest continued expansion in employment in the near term." If this sentiment is echoed in the RBA minutes AND the RBNZ is dovish, it could mark a bottom for AUD/NZD.
There were no major Canadian economic reports released last week but that did not stop the loonie from falling sharply against the U.S. dollar. The move was driven entirely by oil, which dropped as low as $42.74 a barrel. In response, USD/CAD almost reached its 3 month high. The downtrend in oil has been strong but traders are now watching to see if prices find a bottom above $40 a barrel. Canadian retail sales and consumer prices are on the calendar but these reports won’t be released until Friday which means in the first half of the week, CAD will continue to take its cue from the market’s appetite for U.S. dollars and oil.
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