The Kiwi takes the top spot on the watchlist as we’ll get the quarterly employment report from New Zealand in the upcoming Asia session. Will we see this push NZD/USD lower after its recent consolidation break?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a triangle pattern on NZD/JPY, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
DAX: 15954.45 +0.94%
FTSE: 7274.81 -0.19%
S&P 500: 4630.65 +0.37%
NASDAQ: 15649.60 +0.34% US 10-YR: 1.549% -0.024
Bund 10-YR: -0.164% -0.005
UK 10-YR: 1.036% -0.002
JPN 10-YR: 0.069% -0.025 Oil: 83.52 -0.63%
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Fresh Market Headlines and Economic Data:
Strong earnings sends S&P 500 and Nasdaq 100 to new record highs
Canadian building permits rose 4.3% to $10.1B in September
Germany Manufacturing PMI fell to 57.8 in October, down from 58.4 in September
France Manufacturing PMI fell to 53.6 in October, down from 55.0 in September – IHS Markit
ASEAN manufacturing PMI rose from 50.0 in September to 53.6 in October
China’s economy faces new downward pressures, Premier Li Keqiang says; tax cuts needed to help small businesses
Nike filed trademark applications for virtual products as it is preparing for the metaverse
Global Dairy Prices: +4.3% vs. +2.2% rise Oct. 19th
Microsoft announced it has created virtual environments and avatars for meetings, signaling its foray into the Metaverse
Ether hits record high after breaking above $4,500
Upcoming Potential Catalysts on the Economic Calendar
Australia Construction Index at 9:30 pm GMT
New Zealand Employment Change at 9:45 pm GMT
Australia Services PMI at 10:00 pm GMT
Australia Building Permits, RBA Chart Pack at 12:30 am GMT (Nov. 3)
China Caixin Services PMI at 1:45 am GMT (Nov. 3)
U.K. Housing Prices at 7:00 am GMT (Nov. 3)
ECB President Lagarde speech at 9:15 am GMT (Nov. 3)
U.K. Services PMI at 9:30 am GMT (Nov. 3)
Euro area Unemployment Rate at 10:00 am GMT (Nov. 3)
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: NZD/USD
We’ve got a major catalyst ahead for the New Zealand dollar in the form of the latest employment situation update from New Zealand. This is a quarterly read, so the reaction is likely to draw in relatively higher volatility, especially if we get a big surprise versus expectations.
Currently, expectations are for improvement in the NZ jobs sector, with the unemployment rate likely to tick lower to 3.9%. Recent New Zealand PMI data signaled a big rebound in sentiment in September as the employment index stayed well above the 50.6 average at 54.4.
So, if the data shows improvement, we may see a short-term pop in the Kiwi, especially after seeing broad weakness against the major currencies throughout the Tuesday session. If so and the market makes it back up to the broken consolidation range between 0.7140 – 0.7200, then that would be an interesting area to watch and see if sellers look for another shorting opportunity at a better price.
Of course, if we see terrible jobs data from New Zealand instead, that would be a big surprise and likely take NZD/USD lower, especially given the idea that we may see the Federal Reserve announce monetary policy tightening on Wednesday. With a daily average true range of around 60 pips, then this scenario could drive NZD/USD lower to possibly retest the 0.7050 level before the bulls start working their way back in and hold the line.
