NZD/USD Fundamental Forecast – April 29, 2016

By:

Published: Apr 28, 2016, 03:47 UTC

The NZD/USD added 32 points to 0.6916 as the greenback eased. The RBNZ held rates and policy giving the kiwi a leg up. NASDAQ reported that the Reserve

The NZD/USD added 32 points to 0.6916 as the greenback eased. The RBNZ held rates and policy giving the kiwi a leg up. NASDAQ reported that the Reserve Bank of New Zealand left its main lending rate unchanged at 2.25 percent in April as widely expected. Heading into the monetary policy announcement, the markets were looking for clues that the central bank would signal rate cuts in the future. That is because the RBNZ announced it may further ease policy to ensure that average future inflation settles near the middle of its 2 – 3 percent range having unexpectedly cut rates in March.

Following the announcement, the New Zealand Dollar rallied across the board. At the same time, front-end New Zealand government bond yields took off. This suggests that the markets interpreted the RBNZ rate decision as undermining near-term easing bets. In other words, they expect the central bank to cut its main lending rate later rather than sooner.

Scoop New Zealand said that the statement keeps alive the prospect that governor Graeme Wheeler will cut the official cash rate a quarter point to 2 percent at the June 10 monetary policy statement, although his language today was no more emphatic about easing than in March, when he surprised the market with a quarter-point cut. However, he did note today that house price inflation may be picking up in Auckland, having said it was moderating last month, and repeated that pressures were building in other regions.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
NZD	Interest Rate Decision	2.25%	2.25%	2.25%
JPY	Household Spending (YoY) (Mar)	-5.3%	-4.2%	1.2%
JPY	Household Spending (MoM) (Mar)	0.5%	-0.3%	1.7%
JPY	Jobs/applications ratio (Mar)	1.30	1.28	1.28
JPY	National Core CPI (YoY) (Mar)	-0.3%	-0.2%	0.0%
JPY	Tokyo Core CPI (YoY) (Apr)	-0.3%	-0.3%	-0.3%
JPY	Industrial Production (MoM) (Mar)	3.6%	2.9%	-5.2%
JPY	Retail Sales (YoY) (Mar)	-1.1%	-1.5%	0.4%
JPY	BoJ Monetary Policy Statement
JPY	Interest Rate Decision	-0.10%	-0.10%	-0.10%
JPY	BoJ Outlook Report (YoY)
GBP	Nationwide HPI (YoY) (Apr)		5.0%	5.7%
JPY	BoJ Press Conference
EUR	German Unemployment Change (Apr)		4K	0K
EUR	German Unemployment Rate (Apr)		6.2%	6.2%
EUR	German CPI (MoM) (Apr)		-0.2%	0.8%
USD	GDP (QoQ) (Q1)		0.7%	1.4%
USD	Initial Jobless Claims		260K	247K

Upcoming Economic Events that you should be monitoring:

Friday, April 29, 2016

Cur.	Event	Actual	Forecast	Previous
	Japan – Showa Day
NZD	Building Consents (MoM) (Mar)			10.8%
NZD	ANZ Business Confidence (Apr)			3.2
AUD	PPI (QoQ) (Q1)		0.2%	0.3%
AUD	Private Sector Credit (MoM) (Mar)		0.6%	0.6%
EUR	German Retail Sales (MoM) (Mar)		0.3%	-0.4%
EUR	Core CPI (YoY)		0.9%	1.0%
EUR	GDP (QoQ) (Q1)		0.4%	0.3%
EUR	Unemployment Rate (Mar)		10.3%	10.3%
GBP	BoE MPC Member Cunliffe Speaks
USD	Core PCE Price Index (MoM) (Mar)		0.1%	0.1%
USD	Personal Spending (MoM) (Mar)		0.2%	0.1%
CAD	GDP (MoM) (Feb)		-0.1%	0.6%
CAD	RMPI (MoM) (Mar)		3.7%	-2.6%
USD	Chicago PMI (Apr)		53.0	53.6
USD	Michigan Consumer Expectations		80.2	79.6
USD	Michigan Consumer Sentiment (Apr)		90.0	89.7
USD	Baker Hughes U.S. Rig Count			343