NZD: Firmer Thanks To Higher Equities, But Markets Await Tariff Announcement
Apr-01 21:32
NZD/USD tracks near 0.5700 in early Wednesday dealings. The Kiwi was up 0.40% for Tuesday's session, with most of the gains seen during US trade. The currency slightly lagged other commodity FX with AUD and CAD up 0.50-0.60% respectively. EUR finished down slightly, while USD indices were little changed. Aggregate FX moves weren't large as markets await the reciprocal tariff announcement in the afternoon US Wednesday time.
- For NZD/USD technicals, end March lows were just under 0.5650, while topside focus could rest at the 50-day EMA (near 0.5715) and the 100-day (just under 0.5760).
- Higher beta/commodity FX received some support in Tuesday trade amid a better global equity tone. The Euro Stoxx rose 1.37%, while the SPX gained 0.38%. US yields mostly stayed on the backfoot, the 10yr Tsy yield just under 4.17%. Recent lows in early March were at 4.10%. US data was mixed but mostly on the softer side relative to forecasts, with the headline ISM remaining sub 50.0.
- NZ-US 2yr swap spreads are holding just off recent highs, last near -47bps.
- Overnight we had the whole milk powder auction, which rose to $4062 from $4052. We remain elevated but just off Feb highs.
- Coming up shortly there is Feb building permits for NZ.
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ASIA: Coming Up In The Asian Session On Monday
Mar-02 21:18
| 0030GMT | 0830HKT | 1130AEDT | Malaysia Feb S&P Global Malaysia PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Thailand Feb S&P Global Thailand PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Taiwan Feb S&P Global Taiwan PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Indonesia Feb S&P Global Indonesia PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Philippines Feb S&P Global Philippines PMI Mfg |
| 0145GMT | 0945HKT | 1245AEDT | China Feb Caixin China PMI Mfg |
| 0400GMT | 1200HKT | 1500AEDT | Indonesia Feb CPI |
| 0200GMT | 1000HKT | 1300AEDT | India Feb HSBC India PMI Mfg |
| 0730GMT | 1530HKT | 1830AEDT | Thailand Feb Business Sentiment Index |
| 0830GMT | 1630HKT | 1930AEDT | Hong Kong Jan Retail Sales |
ASIA: Coming Up In The Asia-Pac Session On Monday
Mar-02 21:11
| 2145GMT | 0545HKT | 0845AEDT | New Zealand 4Q Terms of Trade Index |
| 2200GMT | 0600HKT | 0900AEDT | Australia Feb S&P Global Australia PMI Mfg |
| 0000GMT | 0800HKT | 1100AEDT | Australia Feb Melbourne Institute Inflation |
| 0030GMT | 0830HKT | 1130AEDT | Australia 4Q Company Operating Profit |
| 0030GMT | 0830HKT | 1130AEDT | Japan Feb Jibun Bank Japan PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Australia Feb ANZ-Indeed Job Advertisements |
| 0145GMT | 0945HKT | 1245AEDT | China Feb Caixin China PMI Mfg |
US OUTLOOK/OPINION: A Stacked Week Ahead For US Macro
Feb-28 21:45
- Next week sees a series a key risk points, starting with trade policy and Trump’s Mar 4 deadline for an additional 10% tariffs on China (for 20% total) and the imposition of the delayed 25% tariffs on Canada and Mexico. US Treasury Sec Bessent offered a potential offramp here, saying Friday afternoon the US wants to see Canada and Mexico match tariffs on China. Whilst following through with that could see temporary de-escalation in US trade tensions with Canada and Mexico, it would likely stoke greater likelihood of China retaliation and/or further fiscal support.
- It’s bookended by ISM manufacturing (Mon) and services (Wed) reports, watched to see whether sharp increases in manufacturing prices paid seen in other surveys first show up in this broader measure and whether there is sign of spillover to services.
- The main data release of the week comes on Friday though, with the nonfarm payrolls report for February.
- The January report saw a modest miss for nonfarm payrolls but it was more than offset by a robust two-month net revision along with a smaller than expected benchmark revision. Further, the unemployment rate again surprised lower at 4.0% for its lowest since May 2024 in a further step away from the 4.3% the median FOMC member forecast for 4Q25 in the December SEP.
- Early days for the Bloomberg survey see nonfarm payrolls growth at a seasonally adjusted 155k in February and for the unemployment rate to hold at that lower 4.0%.
- Note that the nature of the DOGE “deferred resignation program”, with some 77k federal employees accepting the offer, shouldn’t see any direct impact on payrolls growth (in the establishment survey) until the October report as workers will remain on the payroll in the interim. One area where the direct impact could show however is the household survey. Assuming those who accepted the offer are treated as equivalent to a furloughed worker, they’ll register as unemployed. A word of caution though, it’s a much more volatile survey, with a 90% confidence level of +-600k for employment vs +-136k for payrolls.
- Note that post-payrolls Fedspeak sees a notable addition this time, with Fed Chair Powell set to talk on the economic outlook with both text and Q&A, starting at 1230ET. Data and tariff deliberations should still set the tone, but at this juncture we wouldn’t be surprised to see a continued call for patience in rate cut expectations considering dovish repricing seen over the past week. This is a theme that could be seen from other notable Fedspeakers throughout the week, including permanent voters Williams, Waller and Kugler.
