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XTB TRADEBEAT

NZ dollar climbs, mixed data from Australia

Summary:

  • NZ dollar is gaining the most within G10 basket, RBNZ’s acting governor Spencer delivers his remarks on macro-prudential policy 
  • Australian companies noted improved business conditions last month, business confidence eased off though
  • Asian stocks are going nowhere following mixed results on Wall Street

Looking around the FX market one may notice that the NZ dollar has been the strongest current among its major peers as of yet, however, those gains have not been spurred by any macroeconomic reading. The sole event during the Asian session was the speech delivered by RBNZ’s acting governor Spencer, albeit his remarks concerned macro-prudential policy, hence an impact on the domestic currency was almost neither. He said that while New Zealand’s macro-prudential policy has performed well so far, it ultimately cannot control the housing cycle. Spencer added that the review of macro-prudential measures should look at what a role other instruments could play to enhance and/or complement LVR restrictions (loan to value ratio).

link do file download linkThe kiwi is continuing to rise in the morning and it looks like bulls could keep on going north at least toward a supply zone localized at around 0.74. Source: xStation5

In terms of any macroeconomic releases one should pay attention to soft indicators for the Australian economy provided by NAB. According to the country’s bank business conditions among domestic companies improved in February from 18 to 21, meaning the highest point ever. On the flip side, business confidence slid from 11 to 9 mainly due to financial market volatility impacting on sentiment therefore if a jump in volatility was just one-off, the confidence index should not drive lower too much going forward. What’s more, the details illustrate a broad-based improvement seen in each sub-index (profitability, sales, employment and future orders).

link do file download linkBusiness conditions among Australian companies picked up across each sub-index. Source: NAB

Nonetheless, despite quite buoyant readings from the Antipodean economy the local dollar has not responded and it’s trading flat at the time of writing. It’s worth mentioning housing finance releases as well which came in below forecasts being a possible drag on the AUD. Home loans fell 1.1% mom missing the consensus at -0.2% mom, whereas investment lending grew 1.1% mom.

link do file download linkThe Australian dollar is slowly but surely creeping up after a bounce from a demand zone. Thus, the price is likely to continue rising toward below 0.80 where a more notable resistance may be found. Source: xStation5

Calmness has been seen among Asian equities as well as mos of them have not deviated from the flat line too much. The best performer turned out to be the Japanese NIKKEI (JAP225 on xStation5) which increased 0.65% but it could have been an effect of the weakening yen. In turn, the Australian benchmark (AUS200) slid 0.35% while both Chinese indices are trading slightly below the break-even line a while before the close. Lack of decisive moves may have been a result of the mixed session on Wall Street where the Dow Jones (US30) slipped 0.6% whilst the SP500 (US500) lost 0.15% and the NASDAQ (US100) added 0.35%.

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