{"id":166709,"date":"2020-03-17T15:30:29","date_gmt":"2020-03-17T19:30:29","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=166709"},"modified":"2020-03-17T13:40:52","modified_gmt":"2020-03-17T17:40:52","slug":"what-to-expect-from-nz-q4-gdp","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/03\/what-to-expect-from-nz-q4-gdp\/","title":{"rendered":"What To Expect From NZ Q4 GDP"},"content":{"rendered":"
March 17, 2020<\/div>
\r\n<\/div><\/div>

By <\/strong>Orbex<\/strong><\/a><\/p>\n

Coming up we have some important data that could influence the NZD. The more remarkable will probably be the release of last quarter\u2019s GDP numbers.<\/p>\n

At this point, many might have completely forgotten the more optimistic run-up to the end of year holidays and the potential of an end to the trade war.<\/p>\n

Remember when the worst possible things for the markets were increases in tariffs?<\/p>\n

Anyway, New Zealand reports its GDP relatively late into the next quarter. This means the data is rather old. However, it\u2019s still an important guide for the NZD, and the kiwis are in a somewhat of a unique position economically.<\/p>\n

While the rest of the world is under\u00a0the dark cloud of the coronavirus pandemic,<\/a>\u00a0New Zealand to date has only had 8 cases. And their economy is well-positioned for a quick rebound.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

No One is Completely Isolated<\/strong><\/h2>\n

Of course, that\u2019s not to say that New Zealand stocks haven\u2019t been affected by the global pandemic fears. The country is not exempt from the tectonic shifts in the markets.<\/p>\n

And, with most investors looking to hold liquidity, Kiwi stocks have been falling in line with the rest of the world. However, unlike in Europe, shops aren\u2019t closing. Domestic transportation is not halting either, and more importantly, New Zealand\u2019s main trade partner, China, is restarting after officially declaring the epidemic controlled.<\/p>\n

There is an offset between when Chinese economic activity starts to increase \u2013 and presumably, it will take some time to return to prior levels \u2013 and demand for products from New Zealand will return to prior levels.<\/p>\n

We shouldn\u2019t forget that New Zealand relies heavily on Chinese tourism. And travel from the Asian Giant is still on hold.<\/p>\n

Outlook for the Smaller Data<\/strong><\/h2>\n

We can expect the first of the data later this evening, with the release of the GDT Price Index.<\/p>\n

With the lockdown in Europe and expectations of increased travel halts in North America, demand for dairy has been on the wane. Therefore, expectations are for New Zealand\u2019s chief export to diminish in price going forward. This could consequently cause a slight downward pressure on the currency.<\/p>\n

The current account is likely to be overshadowed by currency flows related to general risk appetite in the market. The quarterly current account is generally the most negative in the final quarter of the year.<\/p>\n

So, unless the figure substantially underperforms, it likely won\u2019t be worth the market\u2019s time. Additionally, the 75 basis point cut in the rate makes the current account situation rather moot during the easing cycle.<\/p>\n

What We are Looking At<\/strong><\/h2>\n

The data we want to keep an eye on is the quarterly GDP figure. That is usually the one that\u2019s market-moving. And even with traders distracted by the global pandemic, it could still have an impact.<\/p>\n

Expectations are for Q4 GDP to come in at 0.4%, a decrease in the speed of growth from 0.7% in the third quarter. Of course, the prior quarter was coming off of what was, up until that point, unprecedented monetary policy easing.<\/p>\n

Projections indicate that the annual growth rate will increase to 2.5% from 2.3% prior. This would bring it back to the bottom of the growth rate range that New Zealand had been maintaining for several years.<\/p>\n

In other circumstances, the RBNZ might have argued their policy was working. However, in practical terms, it might turn out to be a target for where investors hope the economy returns to after\u00a0the COVID-19 situation<\/a>\u00a0is under control.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Coming up we have some important data that could influence the NZD. The more remarkable will probably be the release of last quarter\u2019s GDP numbers. At this point, many might have completely forgotten the more optimistic run-up to the end of year holidays and the potential of an end to the trade war. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-166709","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/166709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=166709"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/166709\/revisions"}],"predecessor-version":[{"id":166717,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/166709\/revisions\/166717"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=166709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=166709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=166709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}