NZD: Asia-Pac: NZD/USD Drifts Back Toward 0.5650 Area
Nov-17 04:24
The NZD/USD had a range today of 0.5658 - 0.5681 in the Asia-Pac session, going into the London open trading around 0.5665, -0.30%. The NZD/USD has drifted lower in our session being led by the move higher in USD/Asia. The NZD is one of those currencies in which positioning can become an issue because of the size of the market so when it grinds higher like it did at the back of last week while risk turned lower it is price action worth noting. The place to fade NZD again is closer toward 0.5800 should we see that area again.
- Bloomberg reports: “Nomura Likes Long NZD/USD on Expectation RBNZ Will Hold Rates. The Reserve Bank of New Zealand will refrain from lowering borrowing costs at its meeting on Nov. 26, even though the market is pricing in a reduction, according to Nomura strategists. “The market has been pricing in too aggressive an easing path for the RBNZ,” they wrote in a Friday note. “The RBNZ has hinted that it sees the activity outlook as having bottomed and that prior easing will start to have a more positive impact on economic momentum.”
- MNI AU - Oct Services PMI Up But Still Sub 50, Pointing To Tepid Recovery: The Oct services PMI (via BNZ and Business NZ) edged up to 48.7 from 48.3 in Sep. We look to be on a steady improvement trend, but from depressed levels and the index hasn't been above the 50.0 expansion/contraction point since early 2024. The sub indices mostly ticked higher, but also remained under 50.0. Activity was 48.9, versus 48.0 prior, employment up to 48.8, versus 47.9 in Sep. The employment index eased back to 49.5 from 49.7 prior. The outcome doesn't point to a sharp turn higher in early Q4 economic momentum. BNZ noted (via BBG): "Sector continues to struggle for forward momentum with the sub-component gauges all below long-term averages and making for "dreary reading".
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5675(NZD300m Nov 20), 0.5730(NZD434m Nov 19), 0.5835(NZD300m Nov19) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 35 Points
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
Oct-17 20:51
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
Oct-17 20:30
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Oct-17 20:28
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
