New Zealand Dollar, NZD/USD, Chinese Economic Data, Market Sentiment – TALKING POINTS
- Asia-Pacific stocks aim lower after bearish New York trading session
- China’s manufacturing PMI could reverse sentiment if data surprises on the upside
- NZD/USD Outlook Looks Bearish as Prices Below Major Moving Averages
Wednesday’s Asia-Pacific Outlook
A bearish trading session in New York that saw US equity indices decline for the third day will likely weigh on Asia-Pacific equity markets today. The tech-heavy Nasdaq-100 (NDX) index fell 1.13%, while the benchmark S&P 500 index closed down 1.10%. A rebound in US consumer confidence, according to the Conference Board’s August survey, and encouraging US labor market data bolstered bets on a Federal Reserve rate hike.
However, Chinese economic data could influence market sentiment in the APAC region. China’s National Bureau of Statistics (NBS) is set to release Purchasing Managers’ Index (PMI) data for August at 01:30 GMT. Analysts expect a slight increase to 49.2 from 49.0, although that would still leave the country’s manufacturing sector in contraction with a reading below 50. That said, a surprise beat, especially if higher at the 50 contraction/expansion mark, would provide a tailwind for the market. feeling.
New Zealand released its own economic data this morning, along with July data for building permits. Building permits for the past month rose 5% at a monthly rate. The Reserve Bank of New Zealand’s (RBNZ) aggressive rate hike program has suppressed the Kiwi property market, which was already at historically high prices.
Japan is also expected to release data on industrial production, housing starts and retail sales, all for July this morning. NZD/USD could also move on consumer confidence data for New Zealand in August from ANZ. Bank of Japan board member Nakagawa Junko is due to speak today, but that is unlikely to have much influence on the Japanese yen. Traders also have their sights set on second-quarter GDP data out of India.
NZD/USD Technical Outlook
NZD/USD is heading towards its 2022 low at 0.6060, which was pulled back in July. The decline in the 9-day exponential moving average (pink line) has put pressure on prices over the past few weeks, and the pair is trading below its major simple moving averages (20, 50, 100 and 200 days) . The path of least resistance and trend gives a bearish slant to the short-term outlook for NZD/USD.
NZD/USD daily chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter