New Zealand jobs data to keep the pressure on AUDNZD

The fall in the commodity currencies started after the dovish RBA outcome yesterday afternoon, accentuated by sharp falls in key commodity prices on Chinese futures exchanges.

To put some of the recent moves in the commodity space in context, coal has now fallen around 45% from its October highs, and iron ore has lost approximately 55% from its May highs.

Saving further blushes, the commodity currency complex has found some support this morning after another stonking New Zealand labour market report.

Total employment rose 2.0% q/q vs 0.4% expected. The unemployment rate fell from 4.0% to 3.4%, equal to the previous record low set 14 years ago in Q4 2007. While private-sector wage growth rose by 0.7% q/q, slightly lower than the 0.8% q/q expected.

All in all, another strong report that highlights the impressive underlying strength of the New Zealand economy despite having spent half the September quarter in lockdown.

As the current lockdown has extended into the December quarter, it remains unknown if the New Zealand economy has weathered the 2021 lockdowns unscathed. For this reason, the RBNZ may choose to resist calls for a 50 bp tightening at its November meeting and deliver a more cautious 25 bp hike.

Nonetheless, the events of the past 24 hours have reinforced the divergent monetary policy path that the RBA and the RBNZ are walking and why the AUDNZD cross rate is on our radar

Technically, AUDNZD has spent the past 14 months trading lower in a descending trend channel. The preference is to sell bounces into the 1.0470/1.0530 resistance area looking for the cross to decline towards the bottom of the trend channel near 1.0250 in the coming weeks.

Source Tradingview. The figures stated areas of November 3rd, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.