When is the New Zealand Q3 employment data and how could it affect NZD/USD?

New Zealand quarterly employment report overview

Early Wednesday in Asia, at 21:45 GMT Tuesday the world over, the global market sees the second-quarter (Q3) 2021 employment data from Statistics New Zealand.

Although the Reserve Bank of New Zealand (RBNZ) has already announced the much-awaited interest rate hike, the anticipated strength in the jobs report may propel the Kiwi central bank towards some more, which in turn makes today’s decision the key.

Market consensus suggests a reduction in the headline Unemployment Rate to 3.9% from 4.0% and a softer Employment Change figure of 0.4% versus 1.0% previous readouts. Further, the Participation Rate may also inch up from 70.5% to 70.6%, per forecasts.

Ahead of the data, ANZ said,

New Zealand wage growth is expected to be impacted by inflation and contribute to inflation. The ‘great resignation’ in NZ details how the churn in our labor market slowed last year, but is expected to take off again this year. The tight labor market is providing workers with plenty of options and these are readily being taken up, following limited movement of workers last year. Today’s labor market data will provide a steer on wage inflation, the participation rate and unemployment.

How could it affect the NZD/USD?

NZD/USD edges lower around 0.7100 ahead of the key NZ data during Wednesday’s Asian session. In doing so, the Kiwi pair bears the burden of the Reserve Bank of Australia’s (RBA) firm commitment to wait for a rate hike until 2024, coupled with the pre-Fed caution.

The RBNZ has already hinted towards a firmer employment scenario and is ready to act as and when needed. This joins the job market's previous weakness to keep NZD/USD bulls hopeful of firmer data and the pair’s rebound. However, expectations surrounding the Fed’s tapering and a speech by the RBNZ Governor Adrian Orr following the data will keep the Kiwi traders guessing.

Technically, a clear downside break of a two-week-old trading range directs NZD/USD towards the 61.8% Fibonacci retracement of the May-August downside and the 200-DMA, respectively around 0.7120 and 0.7100 but further weakness will be challenged by the RSI conditions.

Key Notes

NZD/USD slips below key support, consolidates at 200DMA ahead of key NZ jobs report

RBNZ: Higher global interest rates could prove to be a headwind to asset prices

About New Zealand unemployment rate and employment change

The quarterly report on New Zealand's unemployment rate and employment change is being released by Statistics New Zealand.

The unemployment rate is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand labor market. As a result, a rise leads to weaken the New Zealand economy. A decrease of the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish).

On the other hand, employment change is a measure of the change in the number of employed people in New Zealand. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. A high reading is seen as positive (or bullish) for the NZ dollar, while a low reading is seen as negative (or bearish).