The first trading day of the week comes with few economic releases across the board, which may lead to a tight range until the next Asian session, which set to have some strong data from New Zealand, which likely to have a notable impact on the markets. In this article, we will take a look at these data, possible scenarios and how NZD pairs may react.
Definitions:
- Retail Sales: This index measures the change in the total value of inflation-adjusted sales at the retail level. Although this data is extremely late relative to retail data from other countries, it’s the primary gauge of consumer spending and tends to create hefty market impacts
- Core Retail Sales: Change in the total volume of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. Automobile and gas station sales account for about 20% of Retail Sales, but they tend to be volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends. Released Quarterly, about 45 days after the quarter ends.
Possible Delays & Leaks
There are reports that the data is already leaked in the past few days. The reports mentioned that the data had leaked 4 days earlier than the scheduled release time. At the same time, there are reports saying that the source postponed data release due to the Christchurch earthquake. New release time is pending.
Expectations
| Indicator |
Actual/Leaked |
Forecast |
Prior |
|
Core Retail Sales |
— |
1.1% |
2.6% |
| Retail Sales |
[0.9%] |
0.8% |
2.3% |
The ‘Actual’ of 0.9% is being reported in brackets to denote that it’s a press leak and has not been confirmed by the official source. This number may change upon release by the official source.
Why This Is Important
Retail Sales & Core Retail Sales: It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Higher retail sales might be early signs of inflation. In addition, it means that wages may have come up over the past quarter.
Scenarios
- As reported above, if the leaked numbers are true, then NZD pairs might not react that much when the official release is confirmed later tonight.
- If the figures were wrong, traders need to keep an eye on the revisions and most importantly on the Core Retail Sales, any pick up in Core Retail Sales would be a positive signal for NZD pairs, especially against the US Dollar, while weaker Core Retail Sales, might keep NZD under pressure across the board. Should you care about Retail Sales? Yes, but the Core Retail Sales remains the key.
Levels To Watch
| Symbol |
S3 |
S2 | S1 | Pivot | R1 | R2 |
R3 |
| NZDUSD |
0.6955 |
0.6970 | 0.6983 | 0.6998 | 0.7011 | 0.7026 |
0.7039 |
| NZDJPY |
77.20 |
77.38 | 77.50 | 77.68 | 77.80 | 77.98 |
78.10 |
| EURNZD |
1.5038 |
1.5068 | 1.5096 | 1.5126 | 1.5154 | 1.5184 |
1.5212 |
| GBPNZD |
1.7524 |
1.7566 | 1.7589 | 1.7631 | 1.7654 | 1.7696 |
1.7719 |
