CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

RBNZ Preview: Rate rise unlikely to boost the bird - NZDUSD

November 23, 2021 3:02 AM

 

The Q3 unemployment rate fell to a record-equalling 3.4% at the start of November, matching the rate last seen in Q4 2007.

“The fall in the unemployment rate is in line with reports of difficulty finding workers and high labour turnover, and continued travel restrictions on international arrivals, which put pressure on domestic labour supply,” work and wellbeing statistics senior manager Becky Collett noted after the data was released.

Elsewhere, inflation is running at its highest level in a decade, and forward-looking indicators warn of further gains. Last week’s RBNZ survey of expectations noted a significant increase in inflation expectations. Both the 1 year and 2 year ahead measures jumped by 0.7% pts to 3.7% and 2.96%, respectively - well above the RBNZ’s 2% target midpoint.

The strength of recent data has the market fully priced for a 25bp hike to 0.75% tomorrow, and there is a 40% chance priced that the bank will hike by 50bp to 1.00%. Adding intrigue and uncertainty to the decision will be a new set of forecasts and an updated OCR track.

Therefore, trader interest will be two-fold. Firstly, on the size of the rate hike and secondly on the magnitude of the increase in the OCR track, with most expecting the track to pull forward forecast rate hikes and show an end rate near 3.00%.

Due to a considerable tightening in financial conditions via higher fixed mortgage rates, the RBNZ will likely only deliver a 25bp hike. A decision that has the potential to disappoint and keep the pressure on the NZDUSD in the face of a surging U.S. dollar

Technically, the NZDUSD has been trading within a downward sloping trend channel for the past nine months. Consider selling bounces back towards short-term resistance at .7000c, looking for a retest of the September .6860 low before a retest of the August .6805 low.

Source Tradingview. The figures stated areas of November 23rd, 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 with City Index by following these four easy steps:

  1. 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

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

 

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024