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We have the RBNZ around the corner next week where markets are expecting at least a dovish delivery from the Central Bank – Today’s jobs data was critical in that respect in determining just how dovish the RBNZ might be next week, or potentially, even lowering the bar for a rate cut.  

Due to NZ GDP growth being subdued, markets were expecting a stable unemployment rate of 4.3% in today’s  Q1  Labour Market Statistics, accompanied by modest growth in wages and employment.

The data has arrived as follows:

  • Unemployment rate 4.2% vs exp 4.2% vs prior 4.3%.
  • Employment rate -0.2% vs exp 0.5% vs prior 0.1%.
  • Participation rate 70.4% vs exp 70.9% vs prior 70.9%.
  • Average earnings better  1.1% (more to come)

“These data have been volatile of late, but the general trend has been a gradual tightening,”

analysts at ANZ Bank explained prior to the release.

This all  should set the scene for the RBNZ to deliver a dovish May MPS but hold off on an OCR cut.  

About The Unemployment Rate  

The Unemployment Rate released by the  Statistics New Zealand  is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand labor market. As a result, a rise leads to weaken the New Zealand economy. A decrease of the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish).