New Zealand Interest Rates - RBNZ Bollard blames strong New Zealand Dollar

This evening on Wednesday March 7th 2012 at 20:00 GMT (15:00 EST) the Interest Rate Decision and accompanying statement were released from the RBNZ. All analysts expected the RBNZ to hold rates steady at 2.5% and that is exactly what happened, however as often happens with this release, despite no change to rates, the Kiwi Dollar price moves according to the statement which is released which is closely watched to try and figure out what and when the next move out of the RBNZ will be.

This time RBNZ's Bollard brought up the rapid appreciation of the New Zealand dollar as being a factor which makes further hiking of Interest Rates Unnecessary. Here is a link to the statement.

Here is the 30 second chart of the NZDUSD and NZDJPY both sold off when Bollard made this statement.

US GDP Advanced for Q4 2011 - High Expectations slight disappointment but good moves

This friday January 27th 2012 at 8:30 EST (13:30 GMT) the Advanced or 1st reading of GDP for Q4 2011 was released from the USA. The expectations for this were quite high, considering that the Final Reading for Q3 was +1.8%, to jump to +3.0% is nearly doubling growth. As the expectation was quite high some probably considered that a small miss of the expectation would not cause a major sell off, but in the end it did provide a decent move down, although later on in the session things rebounded and there was a rally into the close for the week. Alot of these was do to good headlines about a deal on the deal with PSI about a haircut on Greek Debt, that an agreement was close.

Anyway here is the data:

US GDP QoQ (Annualized) Advanced Q4 2011
Estimates- Median: +3.0% Average: +3.0% Range: +2.4% to +4.5%
Actual: +2.8% Prior: +1.8% No Revision
US GDP Price Index
Estimates- Median: +1.9% Average: +1.7% Range: +0.6% to +2.6%
Actual: +0.4% Prior: +2.6% No Revision
US Core PCE QoQ
Estimates- Median: +0.9% Average: +1.1% Range: +0.8% to +2.4%
Actual: +1.1% Prior: +2.1% No Revision
US Personal Consumption
Estimates- Median: +2.4% Average: +2.4% Range: +1.2% to +3.6%
Actual: +2.0% Prior: +1.7% No Revision

Here are some charts then, first is the Emini S&P 500 Future 1 minute chart:

Also another option for stock index futures is the DAX, or the FTSE, any major index will move with the EMini and DOW on US news. I like the DAX:

In Forex the CADJPY follows the Stock Indices quite well. Any Commodity Currency (AUD,NZD,CAD...or even ZAR or NOK probably will have to review those charts) versus the Japanese Yen will generally follow the stock indices, sometimes Canadian News comes out at the same time as US News so you have to watch out for that. This is the 10 second chart of the CADJPY:

Last month the USDJPY did not follow the lower print and actually moved up (only a small amount of pips). This time it did follow everything down, but normally this pair is avoided since it really doesn't move that much most of the time. Here is the 30 second chart of the USDJPY forex pair:

Actually it was risk-off across the board the USD dollar rallied as well with AUDUSD, NZDUSD, GBPUSD and EURUSD selling off. Although the JPY did appreciate more than the USD on this risk-off move as can be seen by the USDJPY chart above. Here are 2 more charts of AUDUSD and NZDUSD, this time 5 minute chart and you can see more price action. Later on in the US Session as mentioned the deal on PSI haircuts looked close also 90 minutes after GDP the University of Michigan Consumer Sentiment figures were released at 10:00 EST (15:00 GMT). This data has rebounded nicely since some bad prints during August 2011. Now the figure is coming back up to 2 year highs. Here is that data:

US U. of Michigan Confidence
Estimates- Median: 74.0 Average: 74.3 Range: 72.5 to 76.0
Actual: 75.0 Prior: 74.0 No Revision

Finally these 2 charts are GMT+2 and also the Green line at the top is the R1 pivot, which AUDUSD tagged perfectly and sold off from, while NZDUSD overshot a bit. The Red Arrow is the release of GDP while the Blue Arrow is the release of U. of Michigan Confidence. The NZDUSD found support right on the Yellow horizontal line which is the Daily Central pivot:

New Zealand Interest Rates - Unchanged again

Tonight at 15:00 EST (20:00 GMT) the interest rates from New Zealand were released. The Royal Bank of New Zealand (the RBNZ for short) has been on hold since March 2011, when they cut 0.5% to 2.5% in response to the earthquake to help things recover. The RBNZ had said they would hike this rate back up as the rebuilding progressed. Since then however the global economy has weakened and New Zealand funding costs have gone up in response the debt crisis in the Eurozone.

There was no hike but RBNZ's Governor Bollard indicated that the domestic economic growth had been mild and inflation was contained and stated the obvious situations overseas. There had been some expectations the RBNZ would hike in mid-2012, this had been pushed out from March 2012 during the December statement, but the NZDUSD still rallied because it still seemed like this was on the horizon. If anything today's statement seems like this hike might be put off even more, if not turning into a possible cut at some point. OF course it depends how situations develop, but Isreal, Thailand & the Philippines have cut recently. Hungary did not hike when they were expected to. Australia is expected to cut in February.

Despite all this the NZDUSD did rally 60 pips, but this was due to the fact that Ben Bernanke was still speaking at his press conference, and all the markets were rallying to what appeared to be some hint of QE3 for March.

Here is a 10 second chart on the NZDUSD forex pair:

and here is a 1 minute chart showing the extension of this run-up after the news:

New Zealand CPI - Big Deviation lower leads to sell-off on Kiwi Dollar

This evening at 16:45 EST (21:45 GMT) the quarterly figures for New Zealand Consumer Prices was released. These are basically the inflation figures but unlike many other countries they are only released every 3 months instead of monthly like elsewhere. Because of this there are often quite nice surprises on them as it is more difficult for analysts to get there estimate right when the data is less frequent. Here is the data:

New Zealand Consumer Prices (QoQ)
EStimates- Median: +0.4% Actual: +0.4% Range: 0.0% to +0.7%
Actual: -0.3% Prior: +0.4% No Revision

New Zealand Consumer Prices (YoY)
EStimates- Median: +2.6% Actual: +2.6% Range: +2.2% to +3.0%
Actual: +1.8% Prior: +4.6% No Revision

Here is a 10 second chart of the NZDUSD:

and here is the 1 minute chart which shows that the NZDUSD did take its time but came down to make new lows hours after the release:

While the past 2 days have been risk-on and this has lead to some US dollar weakening so this could have muted the sell on NZDUSD a bit. Another option was to buy the EURNZD. Here is a 10 second chart of the EURNZD:

Finally a 5 minute chart shows how the move continued thru the rest of the Asian session into the European session:

New Zealand GDP - Mixed q/q up but y/y down

This Wednesday evening December 21st 2011 at 21:45 GMT and 16:45 EST the GDP figures from New Zealand were released. This number only comes out quarterly and because of this it often surprises the market. The past 2 quarterly releases have had good moves on NZD forex pairs.

It is nearly Christmas and volumes are getting lighter and lighter since since December 9th. This can either mean exaggerated moves or very small move with little response. Tonight's figures were mixed with the quarterly number higher and the yearly lower with the previous yearly figure also being revised down. Here is the news data:

New Zealand GDP q/q
Estimates: Median +0.6% , Average +0.6, Range +0.3% to +0.9%
Actual: +0.8% Prior: +0.1%

New Zealand GDP q/q
Estimates: Median +2.2% , Average +2.2%, Range +1.6% to +2.5%
Actual: +1.9% Prior: 1.5% Revised: +1.1%

This is a 5 second chart of the NZDUSD forex pair, there was a quick blip up of about 10-15 pips which then reversed. These deviations were not large enough for trading anyhow. With the yearly figure not agreeing with the quarterly figure it was definately not something to trade. The skilled scalper could have faded the initial spike and bought the pre-news move up. but this is risky and not for everyone.

Here is a 5 minute chart of the NZDUSD forex pair which shows what happened during the asian session while europe was asleep. The Kiwi-Dollar ran down but rallied as the European Cash Equities opened at 8am.