• RBNZ meeting will be the key event during today’s session
  • DoE will release its weekly update on a change in US oil stocks
  • Housing data from Canada worth looking at as well

Wednesday is going to be dominated by the RBNZ meeting which will deliver fresh update on the economic performance. Even as odds for a change in rates are virtually zero, the NZD might benefit from this event as it’s been able to stay above a key technical level against the greenback. Besides, the DoE will release its weekly report on US oil stocks.

1:15/1:30 pm BST – Canadian housing data (housing starts and building permits respectively): The Canadian dollar had the excellent performance earlier this year when the BoC chose to hike rates twice. Since then the Loonie has lost some of its appeal as the US dollar has gained a foothold fueled by rising odds as for a hike in December. Let us remind that the BoC closed the door when it comes to another rate increase in the nearest future while its President Poloz reiterated that incoming data will be used to assess whether the third rate rise is needed. As a result it’s worth paying attention to the housing data today. The consensus points to 211k in terms of housing starts and -1% mom as for building permits – both readings are for October.

3:30 pm BST – Crude oil stocks by EIA: As usual the API report came in a day earlier and illustrated a draw in US crude stockpiles by 1.56 million barrels. On top of this, we got an unexpected pick-up in gasoline inventories which moved up 0.52 million barrels while distillate stocks slumped more than 3 million barrels. Consequently one may suspect that today’s forecast suggesting a decline in oil stocks by 2.2 million  barrels might be slightly tilted to the upside. That said, even though we get a little lower than estimated decrease it could be supportive of oil prices.

8:00 pm BST – RBNZ meeting: This event is expected to steal the show across the FX market today even as market participants don’t look for any changes in rates. At its meeting in September the bank chose to leave its main rate unchanged (1.75%) underlining that further depreciation of the kiwi would be desirable. Since then the NZDUSD has lowered quite significantly (a drop from above 0.72 to around 0.69 at the time of writing) mainly on the back of politics. Furthermore, a reshuffle across the NZ political scene could entail some reforms in the RBNZ which would increase uncertainty yet more. Otherwise, since the latest meeting we’ve known the stellar jobs report which along with CPI slightly above its latest projection from August might help the NZD. At last, notice that beside the rate decision there will be the monetary policy statement accompanied by fresh projections of CPI and GDP (among others) as well. The broad consensus suggests the RBNZ will stay on hold with the main rate at 1.75%.

Central bank speakers:

  • 8:00 am BST – Norges Bank’s Nicolaisen
  • 11:50 am BST – BoE’s Kohn

link do file download linkThe NZDUSD has approached its key support area and since then it’s been able to bounce back to some extent. A rising trend line could be the closest obstacle for buyers. Source: xStation5