A Quiet Economic Calendar Leaves FOMC Member Chatter in Focus

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Aussie Dollar and the Kiwi Dollar were in action this morning, with the RBNZ also delivering its May policy decision.

For the Kiwi Dollar

Trade data was in focus ahead of the RBNZ monetary policy decision.

In April, the trade surplus widened from NZ$39m to NZ$388m, month-on-month. Year-on-year, the trade surplus narrowed from NZ$1,700m to NZ$730m.

According to NZ Stats,

• The value of goods imports rose by NZ$1.0bn (+26%) to NZ$5.0bn from April 2020.
• Back in April 2020, COVID-19 level 4 lockdown had left non-essential businesses closed and restrictions in place for domestic and international travel.
  • Intermediate goods imports rose NZ$401m (+24%).
  • Capital golds imports rose NZ$247m (+31%).
  • Consumer goods increased by NZ$189m (+17%).
  • Passenger motor car imports rose by NZ$186m (+75%).
• In April 2021, the value of goods exports increased NZ$65m (1.2%) to NZ$5.4bn when compared with April 2020.
  • Exports of untreated logs increased by NZ$287m to lead the way.
  • Milk powder, butter, and cheese exports slid by NZ$311m (-20%), however.
  • There was also a NZ$192m (-24%) fall in the exports of fruit.

The Kiwi Dollar moved from $0.72271 to $0.72237 upon release of the stats.

The RBNZ

On the monetary policy front, the RBNZ left the cash rate unchanged at 0.25%, which was in line with market expectations.

Key points from the RBNZ rate statement included:

• Overall, the medium-term outlook for growth remains similar to the scenario presented in the February Statement.
• Confidence in the outlook is rising as the more extreme negative health scenarios wane given the global vaccination rates.
• Current price pressures are likely to be temporary and are expected to abate over the course of the year.
• Medium-term inflation and employment would likely remain below its remit targets in the absence of prolonged monetary stimulus.
• Economic growth in NZ has returned to close to its pre-pandemic level.
• Substantial monetary and fiscal stimulus supported a catch up in consumer spending.
• Improving global demand and higher prices for NZ’s goods exports were also contributing to economic activity.
• Members agreed to maintain its current stimulatory monetary settings until there was confidence that consumer price inflation would be sustained near the 2% target mid-point and that employment is at its maximum sustainable level.
• The Committee agreed it will take time before these conditions are met.

The Kiwi Dollar moved from $0.72317 to $0.72811 upon release of the rate statement. At the time of writing, the Kiwi Dollar was up by 0.84% to $0.7289, with the RBNZ press conference next up.

For the Aussie Dollar

Construction work done rose by 2.4% in the 1^st quarter. In the 4^th quarter of last year, construction work done had fallen by 0.9%. Economists had forecast a 2.2% increase.

According to the ABS,

• Building work done increased by 2.5%, with engineering work done rising by 2.2% in the quarter.
• The upswing in building work done was driven by residential building work done, which jumped by 5.1%. Compared with the same time last year, residential building work done was up 4.2%.
• Non-residential building work done declined by 1.6%, however, and was 10.4% lower than at the same time last year.

The Aussie Dollar moved from $0.77534 to $0.77576 upon release of the figures. At the time of writing, the was Aussie Dollar up by 0.30% to $0.7775.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.04% to ¥108.74 against the U.S Dollar.

The Day Ahead

For the EUR

It’s a quiet day ahead on the economic data front, with no material stats to provide the EUR with direction.

A lack of stats will leave the EUR in the hands of French business and consumer confidence figures and market risk sentiment.

At the time of writing, the EUR was down by 0.02% to $1.2248.

For the Pound

It’s another particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will continue to leave market sentiment towards the economic outlook to provide direction. Following a string of impressive stats, downside for the Pound should, therefore, be limited.

At the time of writing, the Pound was down by 0.01% to $1.4151.

Across the Pond

It’s a quiet day ahead on the calendar. There are no material stats due out of the U.S to provide the markets with direction.

A lack of stats will leave the Dollar in the hands of FOMC member chatter and Capitol Hill.

At the time of writing, the Dollar Spot Index was up by 0.03% to 89.666.

For the Loonie

It’s also quiet day ahead on the economic data front. There are no material stats due out of Canada.

The lack of stats will leave the Loonie in the hands of crude oil inventory numbers.

At the time of writing, the Loonie was up by 0.12% to C$1.2052 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.