Preview of Antipodean data double header: AUD/USD and NZD/USD
Tony Sycamore December 16, 2020 12:30 PM
An economic data doubleheader in the Antipodeans tomorrow in the form of Australian employment data for November and Q3 GDP data in New Zealand.
While traders could be excused for having other things on their minds at this time of the year, tomorrow's data will provide the last meaningful update on the Antipodean economies until mid-January.
Australian Employment November:
Despite the continued deterioration in the Australia - China relationship, likely to cast a shadow into 2021 and possibly beyond given Chinas reputation for playing the long game, things are looking quite rosy here in Australia at present.
COVID-19 has been contained, commodity prices remain supportive, consumer confidence is back to 10-year highs and the labour market is expected to confirm a continued improvement.
Following a 179k gain in October, employment is expected to rise by 50k driven by the continuing reopening in Victoria. However, a higher participation rate will keep the unemployment rate stuck at around 7%, representing spare capacity, a key point of concern for the RBA.
Heading into tomorrow's job data, the rally in the AUD/USD has stalled just ahead of .7600c. However, price has broken higher and the expectation remains for a rally towards .7800c. Pullbacks are likely to be well supported back towards .7470/50 and again at .7420/00.
New Zealand Q3 GDP:
The New Zealand economy is also in a healthy position to close out the year. Containment of the virus and a rapid fiscal response has provided the backbone for the economy's rebound. This is expected to translate into a thumping 13.5% rise q/q, reclaiming all and more of the previous quarter's 12.2% fall.
Challenges lay ahead for the New Zealand economy in 2021. However, with talk of an imminent re-opening of borders in the form of a travel bubble with Australia, it would allow the New Zealand economy to continue to grow in Q4.
Heading into tomorrow’s data, the NZD/USD’s break above .7000c is viewed as a bullish medium-term development, opening the way for the rally to extend towards .7500c. In the short term, the NZD/USD has paused for breath with pullbacks likely to find support near .7000c and again at .6950.
Source Tradingview. The figures stated areas of the 16th of December 2020. 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
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.