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NZD/USD Fundamental Analysis, May 7, 2015 – Forecast

Analysis and Recommendation: (NZD/USD Forecast)

The NZD/USD tumbled 72 points to trade at 0.7486 after the release of employment change data which missed expectations and was lower than last month.  Weak global dairy prices have prompted analysts to pull back their expectations for Fonterra Cooperative Group’s payout to farmers for next season.

Average prices dropped 3.5 percent in the GlobalDairyTrade auction overnight. New Zealand’s key product, whole milk powder, slipped an average 1.8 percent, extending its cumulative decline over the past five auctions to 27 percent.

Economist at Markit said that despite the strong result for the Chinese services sector, a downturn in manufacturing operating conditions had led to a weaker expansion of overall business activity in April. The modest rise in service staff numbers had failed to offset sustained job shedding at manufacturing firms, leading to total employment falling for the second month in a row.

The unemployment rate remained at 5.8 percent in the March 2015 quarter (from a revised 5.8 percent in the December 2014 quarter), while the labour force participation rate reached an all-time high of 69.6 percent, Statistics New Zealand said today.

“This is the greatest share of New Zealanders we have ever seen in the labour force. The largest increase came from 20 to 34-year-olds, who accounted for nearly half this year’s increase,” labour market and household’s statistics manager Diane Ramsay said.

Over the year to the latest quarter, the number of people employed increased 74,000 (3.2 percent) while the number of people unemployed fell 1,000 (0.6 percent), as measured by the Household Labour Force Survey.

ForexTraq provides in-depth analysis for each currency and commodity 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.

Today’s economic releases actual vs. forecast:

Cur. Event Actual Forecast Previous
Japan – Greenery Day
  NZD Employment Change (QoQ) 0.7% 0.8% 1.2%
  AUD Retail Sales (MoM) (Mar) 0.3% 0.4% 0.7%

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Upcoming Economic Events that you should be monitoring:

Thursday, May 7, 2015

Cur. Event Actual Forecast Previous
  AUD Employment Change (Apr) 5.0K 37.7K
  AUD Full Employment Change (Apr) 31.5K
  AUD Unemployment Rate (Apr) 6.2% 6.1%
  EUR German Factory Orders (MoM) (Mar) 1.5% -0.9%
  RUB Central Bank reserves (USD) 353.5B
  USD Initial Jobless Claims 280K 262K
  CAD Building Permits (MoM) (Mar) 2.5% -0.9%

Government Bond Auctions

Date Time Country

May 07 08:30 Spain Auctions 0.5% Oct 2017 Bono, 0.55%

May 07 09:10 France Auctions OATs

May 07 09:10 Sweden Holds inflation-linked bond auction

May 08 10:00 Norway Details bond auction on 12 May

May 08 15:30 Italy Announces details of BTP

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

May 13 09:30 Germany Eur 3bn Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

NZD/USD ExchangeRate

 

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