NZD/USD Fundamental Forecast – January 20, 2016

Analysis and Recommendation:

The NZD/USD tumbled 28 points to 0.6425 after Chinese data disappointed although business confidence printed better than expected. China’s economy slowed in December, capping the weakest quarter of growth since the 2009 global recession, as the Communist leadership struggles to manage a transition to consumer-led expansion.

Industrial production, retail sales and fixed-asset investment all slowed at the end of the year, while gross domestic product rose 6.8 percent in the fourth quarter from the same period of 2014. GDP increased 6.9 percent — the least since 1990 — for the full year, in line with the government’s target of about 7 percent.

China’s economy is growing at two speeds, with old rust-belt industries from steel to coal and cement in decline while consumption, services and technology do better. Underscoring that shift, services accounted for half of the economy last year, Premier Li Keqiang said Saturday, the first time it’s reached that milestone since the nation opened to the outside world in the late 1970s.

Official government figures show China’s gross domestic product grew 6.8 percent in the three months ended Dec. 31 from a year earlier, missing expectations by 0.1 of a percentage point, while other releases showed slower Chinese retail sales, industrial production and fixed-asset investment. That weighed on the Australian and New Zealand dollars, with both nations reliant on China as a trading partner.

The Chinese reports come as investors wait for US markets to resume trading following a public holiday and Friday’s slump on Wall Street. Traders will also be watching the overnight GlobalDairyTrade auction, with futures pricing indicating a fall in dairy prices.

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:

 

Upcoming Economic Events that you should be monitoring:

Wednesday January 20, 2016

Government Bond Auctions

Date Time and Country

Jan 20 11:03 Sweden SEK 4bn 1% Nov 2026 Bond

Jan 20 11:30 UK GBP 4bn 1.5% Jan 2021 Gilt

Jan 21 10:30 Spain Auctions Bonos/Obligaciones

Jan 21 10:50 France Holds bond auction

Jan 21 19:00 US Holds 10-year TIPS auction

Jan 21 17:20 Italy Details of CTZ/linker auction on Jan 28

Jan 21 17:20 Sweden Details of I/L auction on 28 Jan

Jan 21 n/a US Details of 2-yr note auction on Jan 26

Jan 25 11:30 Germany EUR 1.5bn Jan 2017 Bubill

Jan 25 13:00 Norway Details of bond auction on Jan 27

Jan 25 17:20 Italy Details of BTP/CCTeus on 28 Jan

Jan 26 11:10 Italy Holds CTZ/linker bond auction

Jan 26 n/a US Holds 2-year note auction

Jan 27 11:05 Norway Holds bond auction

Jan 27 11:30 Germany EUR 1bn 2.5% Aug 2046 Bund

Jan 27 17:20 Sweden Details of bond auction on 03 Feb

Jan 27 n/a US Holds 2-year FRN auction

Jan 27 n/a US Holds 5-year note auction

Jan 28 11:03 Sweden Holds I/L bond auction

Jan 28 11:10 Italy Holds BTP/CCTeus auction

Jan 28 n/a US Holds 7-year note auction

Feb 02 n/a UK Details of Gilt auctions on Feb 09 & 11