Sentiment may have a chance to recovery Wednesday following a
better-than-expected jobs report out of New Zealand. According to the
Economic Calendar, New Zealand reported an employment change of 0.6%
quarter-over-quarter versus an expected 0.3% for the three months ending
March. The unemployment rate fell to 4.7% versus the 4.9% forecast. The
better-than-expected print could further reduce the RBNZs dovishness on
policy moving forward.To get more news about
WikiFX, you can visit wikifx.com official website.
New Zealand‘s job report was preceded by a financial stability report
from the Reserve Bank of New Zealand (RBNZ), which stated the island
nation’s economy has fared better than initially forecasted. Although
the report did also note that vulnerabilities in the financial system
persist. Elsewhere, The Australian Dollar received some positive news
through an upgraded final services PMI print for April, rising to 58.8
from 55.5 in the preliminary reading.
WEDNESDAY‘S ASIA-PACIFIC OUTLOOK
Asia-Pacific markets may still move lower following a gloomy Tuesday
on Wall Street that saw technology stocks lead indexes lower.
Asia-Pacific markets may get off to a rough start if the downbeat
sentiment on Wall Street cascades into broader sentiment. The Nasdaq 100
index (NDX) sank nearly 2%, and the market’s fear gauge VIX index
recorded a gain of about 6.4%. The selloff stemmed from US Treasury
Secretary Janet Yellen's commentary, stating rates may have to rise to
prevent the economy from overheating.
The comments from the Treasury Chief are in direct conflict with
recent Fed talk, but some believe she was referencing market interest
rates and not the Federal Reserves benchmark rate used to spur or slow
economic growth. Nonetheless, the market reaction shows just how
sensitive investors are to any proposed rate increases.
The US Dollar also took notice of Ms. Yellens comments, pushing the
DXY higher. Risk-sensitive currencies were overly impacted, however,
with the Australian Dollar and New Zealand Dollar both sinking near a
full percentage point versus the Greenback. Treasury markets were not
spared from the seemingly hawkish comments from the former Fed Chair,
which pushed yields lower on the longer-dated side of the curve.
Chinese stock markets will remain closed on Wednesday for the labor
day holiday. While mainland Chinese markets will be closed, Hong Kong‘s
Hang Seng Index (HSI) will be open for trade and perhaps looking to
extend gains from Tuesday when the index recorded a 0.70% move higher.
China will see some potentially hard-hitting economic data later this
week as investors look toward trade data and PMIs from the world’s
second-largest economy.
NZD/USD TECHNICAL ANALYSIS
The Kiwi Dollars move lower against the US Dollar has put NZD/USD in a
defensive stance against its 20-day Simple Moving Average (SMA). The
recently supportive 100-day SMA was also breached, but the currency pair
recaptured the SMAs following the jobs report.
The 61.8% Fibonacci retracement also appeared to deflect further
downside and could step in as support again on the next move lower. That
move lower may be on the cards, with MACD turning lower after crossing
below its signal line, a bearish sign.
The Wall