When is the New Zealand Q1 retail sales data and how could it affect NZD/USD?

Overview of quarterly retail sales

Early Monday morning in Asia, 22:45 GMT on Sunday, the market sees the quarterly retail sales data from the Statistics New Zealand.

Considering the pair’s latest downbeat performance and the Reserve Bank of New Zealand’s (RBNZ) early signals for the negative rates, today’s second quarter (Q2) Retail Sales numbers will be the key.

With the coronavirus (COVID-19)-led economic slowdown well portrayed in the monthly New Zealand Credit Card Spending, down 5.8% in July, the headlines figures are likely to favor the bears and could flash a heavy drop versus -0.7% prior. That said, the Retail Sales ex-Autos grew 0.6% during the first quarter (Q1) of 2020 on a QoQ basis.

While anticipating no surprise form the disappointing data, analysts at the Australia and New Zealand Banking Group said, “NZ Real retail sales for Q2, which should be a bit of a shocker, unsurprisingly.”

On the other hand, Westpac gave details of their bearish outlook, “Westpac and the market expect the sharp drop in spending during the lockdown period to show in Q2 real retail sales (est. 12.0% and 16.3%, respectively, prior -0.7%).”

How could it affect NZD/USD?

The NZD/USD pair currently trades around 0.6535 amid the early Asian session on Monday. In doing so, the kiwi pair remains pressured after four consecutive weekly losses flashed by the end of Friday’s trading.

Considering the pandemic’s resurgence in the Pacific nation, coupled with the RBNZ’s recently dovish tone, downbeat data is likely to exert additional pressure on the NZD/USD prices. However, the market already knows that the negative outcome will arrive and hence the quote’s declines should be ephemeral and may not push RBNZ towards any major decision-making.

Technically, NZD/USD has repeatedly bounced off 50-day EMA, currently around 0.6530, which in turn keeps the bears away. Also adding to the support is the 0.6500 threshold. On the contrary, a downward sloping trend line from July 31, at 0.6630 now, becomes the key upside barrier.

About New Zealand Retail Sales

The Retail Sales released by the Statistics New Zealand measures the total receipts of retail stores. Quarterly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).