Forex: NZD/USD: NZIER business confidence highest in two decades

on Jan 14, 2014
Updated: Oct 21, 2019
Listen Tuesday, January 14th:_

The New Zealand Institute of Economic Research (NZIER) overnight UTC released its Quarterly Survey of Business Opinion, revealing that business confidence in the fourth quarter of last year jumped to a 20-year high, with a nett 52 percent of firms reporting optimism, versus the prior quarter’s level of 38, for the highest reading since June 1994.
The measure of domestic trading activity rose to its highest level since March 2005, with a seasonally adjusted 15 percent of firms experiencing a pick-up. Expectations for increased activity in the coming quarter grew to 32 percent from the prior 24 percent.

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Commenting on the survey, NZIER principal economist Shamubeel Eaqub writes that “this quarter every region in our survey was doing better”, whereas “until recently much of the recovery was concentrated in Canterbury”. Now though, optimism has “broadened to most regions across New Zealand, which points towards a more sustainable and stable recovery”.

Firms that had increased their hiring in the quarter jumped to seven percent from the prior one percent. As against that though, hiring intentions for the coming quarter fell to 12 percent from 17.
The survey was taken before 15 December, so not capturing the rise in retail activity over the peak Christmas-New Year holiday period, but still registered the highest level of retail sales since September 2002. The percentage of firms with higher sales rose to 20 from two percent and businesses reporting higher overseas orders grew to 18 percent from the previous five.

“Firms intend to raise prices in coming quarters due to increasing capacity pressures and strengthening economic growth,” NZIER’s Eaqub writes, adding that “capacity constraints are most pronounced in Canterbury, but are starting to emerge in other regions too”.
Thus far today the NZD/USD has been in ascent, reaching its highest point since 24 October at 0.8431 before easing to be currently trading at 0.8416. If the rise continues, the pair will score a third consecutive day of north-bound travel.

In the United States today, the markets are anticipating the release of retail sales data by the Census Bureau shortly, at 13.30 UTC. Analysts expect a 0.2 percent increase in December m/m and a 0.4 percent rise in core (ex-auto) sales.
Business Inventories m/m is due out at 15.00 UTC with a forecast for a 0.4 percent growth.
Two FOMC members are scheduled to speak later today and may offer the markets some insights into what the US Federal Reserve will do next with the tapering of its stimulus programme.
Philadelphia Federal Reserve Bank president Charles Plosser is due to speak on the US economic outlook at the Union League in Philadelphia at 17.45 UTC and his Dallas counterpart Richard Fisher will offer his thoughts on both the US and regional economic outlooks at a meeting of the National Association of Corporate Directors in Dallas at 18.20 UTC.
Today’s resistances: 0.8435, 0.8455 and 0.8475.
Supports: 0.8330, 0.8300 and 0.8285.


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