Summary

Today we have the Bank of New Zealand releasing its latest quarterly survey expectations. The data will help to show the extant at which low inflation expectations are becoming entrenched ahead of its monetary policy statement on the 10th of November 2016. A cash rate cut is expected. Based on interest rate swaps, the odds of the RBNZ cutting the official cash rate to 1.75 are 80-85 percent. Having highlighted the risk of how low inflation could drag inflation expectations down further to levels that are inconsistent with meeting the inflation target. So next week’s result will have some bearing on how much lower the RBNZ is prepared to take the Official Cash Rate

Today’s Economic Data releases
Today’s Data releases are the last remaining pieces of information ahead of the November Monetary policy statement.
Participation rate Q3
It is important to note that the New Zealand’s participation rate has generally been trending up even though it has been volatile. In the second quarter of the year we saw an increase that was a result of the redesign of the labor force survey. The participation rate is vital as it indicates and directly proportional to the employment rate.

Unemployment rate
The Unemployment rate in New Zealand fell to 5.1 percent in the second quarter of 2016 from a downward revised 5.2% in the previous period and below market expectations of 5.3 percent. Employment increased by 2.4 percent, partially reflecting improvements to the Household Labor Force Survey. It is eyed to remain the same at 5.1% for the third quarter.

Employment change
Employment in New Zealand increased 2.4 percent quarter-on-quarter to 2460 thousand people in the second quarter of 2016. A 2.2% change is forecasted.

Global Dairy trade price index
Another gain in the price of whole milk powder could push the price to its highest level since March 2015 after a 2.9 per cent gain two weeks ago. An increase of 5% for whole milk powder and the Global Dairy Trade index is expected.

Labor Cost Index
Strong growth in the labour force and a subdued inflation backdrop is likely to translate into ongoing softness in wage growth. A forecast of 0.4% lift in the private sector would leave annual wage inflation at 1.7% on this measure.

For further reading in this regard, Below I provided links to sites and articles I read in compiling this information.
Westpac Weekly
NZ Herald
New Zealand Economic market focus

NzdUsd Daily chart

Second month into the fourth quarter should be interesting. With new Monthly pivots generated, we saw price opening just below the monthly pivot point and currently above the 21 moving average.

NzdUsd H4 chart

This week price opened right on the weekly pivot point. we have seen a lot of braiding between yesterday and today until an upside break out. currently price is just above the weekly pivot point.

NzdUsd H1 Chart

Price opened on the DPP after yesterday's day-long range. It then shot up to the bull daily target, DM4. It is now retracing back and currently ranging between DR1 and DM3

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