NZD/USD Fundamental Analysis November 18, 2014 Forecast

Analysis and Recommendation:

The NZD/USD soared 66 points after promises of growth from the G20 and the easing US dollar. The big mover was an exceptionally strong print of both Core retail sales which beat estimates along with a jump in retail sales which printed at 1.5% increase against expectations of 0.9%. Finance Minister Bill English said on the sidelines of the G20 meeting in Brisbane that he expects inflation in New Zealand will pick up once pressures in the labour market emerge. Annual inflation is currently 1 percent, the bottom of the central bank’s 1 percent-to-3 percent target range. The kiwi has gained against a broadly weaker yen amid speculation Japanese Prime Minister Shinzo Abe will call an election for next month, seeking a mandate for unpopular policies including an increase in sales tax. Traders are also awaiting gross domestic product figures for Japan today, expected to show that economy grew an annualized 2.2 percent in the third quarter.

Retail sales rose a brisk 1.5 per cent in the September quarter in real or volume terms, making 4.7 per cent for the year and outstripping the rise in retailers’ takings. In dollar terms sales were up a seasonally adjusted 0.9 per cent, making 4.1 per cent for the year.

The fact that sales volumes have risen more than values reflects falling prices over the past year in nine of the 15 retail industries the statisticians divide the sector into. Indeed prices are lower than they were four years ago in nine retail industries, led by a drop of a third in prices for electronic and electrical goods. In the latest quarter retail prices fell 0.6 per cent. This is attributed to seasonally weak food prices and the legacy of past strength in the New Zealand dollar.

FxEmpire 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:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Nov 18 09:30 Spain 6 & 12M T-bill auction

Nov 18 10:00 Slovakia Eur 0.15bn 2018 & Eur 0.15bn 2017 bonds

Nov 19 15:20 Sweden Announces details of bond auction on Nov 26

Nov 20 09:30 Spain Bono/Obligacion auction

Nov 20 10:03 Sweden I/L bond auction

Nov 20 10:30 UK Auctions 0.625% 2042 I/L Gilt

Nov 20 16:30 Italy Announces details of BTPei/CTZ auctions on Nov 25

Nov 21 16:30 Italy Announces details of BOT auction on Nov 26