- AUD/NZD remains consolidated around the 1.08 handle.
- NZ GDP was over quickly and markets now await Australia’s data highlight for the week in the August labour force survey.
AUD/NZD has consolidated around the 1.08 handle this week and the New Zealand Gross Domestic Produce had little impact despite coming in higher than expected.
New Zealand’s GDP rose by 0.5% in the June quarter and year-on-year growth slowed to 2.1%, the lowest since 2013; In per capita terms, annual growth slowed to 0.5%, its lowest since 2011.
“The mix of growth for the quarter was broadly as expected. Food manufacturing, mining and construction eased back after large gains in the previous quarter, while agriculture and services picked up after weak March quarter results. The main surprise for us was a 0.3% drop in professional services – one of the largest components of GDP – despite the related surveys pointing to solid growth,” analysts at Westpac explained, adding, “… the result was in line with the Reserve Bank’s forecast in its August Monetary Policy Statement, and on its own is unlikely to shift the dial on the likelihood of further OCR cuts. We’re expecting no change at next Wednesday’s OCR review, but a further 25 basis point cut in November.”
Aussie data coming up
Meanwhile, looking ahead, markets await Australia’s data highlight for the week in the August labour force survey – “Jobs growth has beaten consensus in 4 of the past 5 months, including a steep 41k gain in July. We look for a correction in August, just +7k (median +15k). This would trim annual jobs growth to 2.3%yr (US payrolls are up 1.4%yr). If the participation rate holds at a record high 66.1%, the unemployment rate should nudge up to 5.3% (median 5.2%),” analysts at Westpac explained.