NZD/USD Fundamental Analysis October 22, 2014 Forecast

Analysis and Recommendation:

The NZD/USD gained 6 points after the release of Chinese data which beat expectations. GDP and Industrial Production both beat forecasts. The NZD is trading at 0.7973. Gross domestic product (GDP) growth for the July-September quarter came in at 7.3 percent from the year-ago period, beating a Reuters forecast for a 7.2 percent expansion and after the 7.5 percent growth in the second quarter.

This is the slowest reading since the first quarter of 2009, when China’s growth rate slumped to 6.6 percent amid the depths of the global financial crisis. The GDP data have been closely watched for hints on whether policymakers will unleash further stimulus to buoy an economy struggling with a slump in its key property sector, a slowdown in credit growth and subpar inflation.

Other data released alongside the gross domestic product (GDP) report on Tuesday showed factory output rose 8.0 percent in September from a year earlier, beating expectations for a 7.5 percent increase and up from August’s six-year low of 6.9 percent.

Fixed asset investment, a key driver of the Chinese economy, was weaker than expected. It climbed 16.1 percent in the first nine months compared with the same period a year earlier, below forecasts for a 16.3 percent rise and cooling from 16.5 percent in the first eight months of the year.

Retail sales rose 11.6 percent in September from a year earlier, below analysts’ predictions of 11.8 percent and down from the previous month’s 11.9 percent.

The US dollar index, which measures the greenback against a basket of currencies, declined overnight after IBM dropped its previous pledge for 2015 growth, ditched its five-year growth plan and said it would offload its unprofitable chip unit after its quarterly earnings fell. Investors are concerned about the flow on affects to the US economy from the Fed’s plan to end its quantitative easing stimulus this month and the outlook for rising US interest rates next year.

FxEmpire provides in-depth analysis for each currency and commodity 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.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Finland Maximum Eur 1bn 2.75% Jul 2028 bonds

Oct 21 11:00 Norway Nok 3bn 3% Mar 2024 bonds

Oct 21 11:00 UK GBP 3bn 2.75% Sep 2024 Gilt

Oct 21 12:30 ESM Up to Eur 1bn 6M T-bills (Apr 2015)

Oct 22 11:30 Germany Eur 2.0bn 2.5% Aug 2046 Bund

Oct 23 11:03 Sweden Sek 1bn 0.5% Jun 2017 I/L bond

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US USD 7bn 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29

Oct 27 12:30 Germany Eur 2.0bn new 12M Bubill (Oct 2015) auction

Oct 27 18:30 Italy Announces details of BTP/CCTeu auctions on Oct 30

Oct 27 12:10 Italy BTPei/CTZ auctions

Oct 28 12:10 Italy BOT auction

Oct 28 19:00 US 2Y Note auction

Oct 29 12:03 Sweden Bond auction

Oct 29 12:30 Germany Eur 4.0bn Aug 2024 Bund auction

Oct 29 17:30 US 2Y FRN auction

Oct 29 19:00 US 5Y Note auction

Oct 30 12:10 Italy BTP/CCTeu auctions

Oct 30 19:00 US 7Y Note auction