Kiwi jumps on RBNZ, A busy European calendar

FXStreet (Mumbai) - The New Zealand dollar was the best performers across the fx space in Asia, jumping above 0.74 mark after RBNZ announced new policy restrictions on the housing market. While the Australian dollar keeps gains, albeit easing-off 0.80 – the big figure. USD/JPY trades muted, holding on to the crucial 50-DMA support.

Key headlines in Asia

Japan Current Account came in at ¥2795.3B, above expectations (¥2060B) in March

Australia's Q1 wage price Index eases in Q1

RBNZ announces new LVR restrictions on Auckland housing

RBNZ Wheeler: NZD value unsustainable, unjustified

Dominating themes in Asia - centered on JPY, AUD, NZD

An eventful Asian session, with broad US dollar
weakness lifting the Antipodeans while the dollar-yen pair remained below 120 handle little affected by upbeat Japanese current account. The US dollar extended weakness across the board from Tuesday following below estimates US JOLTS jobs opening numbers.

The Kiwi rallied this session after the Reserve Bank of New Zealand (RBNZ) announced new restrictions to tackle the overheating witnessed in Auckland’s housing markets. The AUD/USD pair shed some gains and retraced below 0.80 barrier after Australia’s wage growth slowed in Q1.

Meanwhile, market now shift their focus towards a series of China economic releases viz. Apr industrial production, retail sales and fixed investment due to be released at 5.30GMT

Heading into Europe - centered on EUR, GBP

Today is expected to be the busiest day in the week in terms of potential market-moving macro data. The EUR calendar kicks-off with German Prelim GDP followed by European GDP and inflation figures, fresh inflation forecasts from the Bank of England (BOE), UK employment data, as well as US retail sales finally ending the day.

However, BOE Quarterly Inflation Report and jobs data from the UK are likely to remain the major highlights.
Smooth political transition into the next parliament, steady macro data; upbeat business surveys for the first quarter, and the BOE’s view that the pass-through from sterling appreciation to the CPI is likely to change the BoE's inflation forecasts in its quarterly Inflation Report on Wednesday.

While the UK jobless rate is estimated to have dropped further to 5.5% in quarter to March. Jobless claims are expected to have declined by 20,000 claimants in April, bringing the claimant-count rate down to 2.2%, from 2.3% a month before. Wage growth excluding bonuses is expected to have picked up to 2.1%, up from 1.8% a month before.

Later in the North American session, markets will focus on April's US retail trade numbers, which will provide more clarity in terms of the economic rebound that can be expected in the early second quarter. US retail sales are estimated to ease in April by edging up just 0.2%, following a 0.9% advance in March.

NZD/USD in highs around 0.74

The New Zealand remains heavily bid against its American counterpart in the mid-Asian session, lifting NZD/USD above 0.74 barrier. The Kiwi jumped in Asia after the RBNZ announced a new policy today aimed at cooling investor activity in Auckland's overheated housing market. While markets now await a batch of China macro data due out shortly.
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