When is New Zealand GDP report and how could it affect NZD/USD?

Early Thursday in Asia (22:45 GMT on Wednesday), the market sees first quarter (Q3) Gross Domestic Product (GDP) data from New Zealand.

Considering the survey period excluding the major time of the coronavirus (COVID-19)-led lockdowns, the key data loses its value. Also dimming the charm of the top-tier release could be the StatsNZ comments suggesting that there are wide measurement issues that could lead to a varied print of the outcome. Even so, the reading can offer immediate direction to the NZD/USD pair.

The forecast suggests, GDP to shrink 1.0% versus 0.5% prior on a QoQ basis, which in turn will lead to 0.3% YoY number against 1.8% previous readout.

The Australia and New Zealand Banking Group (ANZ) provides the details of GDP while not anticipating fireworks:

We have penciled in a drop of 1.3% q/q but uncertainty is huge due to measurement issues. The data will have limited value; any contraction that isn’t measured in today’s print will be captured in the Q2 result instead. 

TD Securities follow the footsteps while saying:

For Q1 GDP we pencil in a 1% drop q/q and expect annual growth to be flat. StatsNZ has indicated there are measurement issues meaning the forecasts could be rather varied. At -1%, this is not as weak as the RBNZ's -2.4% q/q forecast, but is below Treasury's for a 0.7% drop. Expect to see weakness in services, especially travel, education and F&B sectors. The release is unlikely to prompt a market response, the Q2 print will be more telling.

How could the GDP affect NZD/USD?

As mentioned earlier, the economic release is less likely to offer any fireworks. Even the Reserve Bank of New Zealand (RBNZ) might consider it a non-event for any future decision-making as it has already undertaken mammoth steps to combat the pandemic. However, the wide uncertainty surrounding the measurement could offer any extreme results, which in turn might not refrain from resulting in the immediate volatility.

Technically, the pair’s latest break below the monthly support line seems to drag it towards a 200-day SMA level of 0.6320. However, the weekly low near 0.6380 offers immediate rest to the pair during the further weakness. On the contrary, February month high near 0.6500 acts as the immediate resistance for the pair ahead of the monthly top surrounding 0.6580.

Key notes

NZD/USD breaks outside of the triangle pattern but there is some traffic above current levels

New Zealand GDP Preview: Room for a positive surprise, NZD/USD may advance, pending market mood

About New Zealand Gross Domestic Product (GDP)

The Gross Domestic Product released by the Statistics New Zealand is a measure of the total value of all goods and services produced by New Zealand. The GDP is considered as a broad measure of New Zealand economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the NZD, while a falling trend is seen as negative (or bearish) for the NZD.