NZD/USD Rose After New Zealand Posted Unexpected Trade Surplus
- NZD/USD rose after New Zealand’s first trade surplus since May 2015
- Trade Balance NZ$8mil in Jan vs. –NZ$271m expected, –NZ$38mil prior
- Markets still project at least one 25bps RBNZ rate cut within 12 months
NZD/USD gained after New Zealand’s trade data posted the first surplus since May 2015. January’s figure was NZ$8 million, better than the expected deficit of -NZ$271 million and December’s revised print of –NZ$38 million. The 12-month year-to-date trade gap narrowed to –NZ$3.58 billion, smaller than the projected shortfall of –NZ$3.87 and the prior –NZ$3.53 billion result.
Looking at the report’s internals, exports fell less than expected to NZ$3.9 billion versus economists’ estimate of NZ$3.71 billion. Meanwhile, imports was trailed forecasts of NZ$3.95 billion, coming in at NZ$3.89 billion. This was the lowest reading since February 2015.
While the New Zealand Dollar appeared to find support in better-than-expected headline figures, it ought to be noted the priced-in monetary policy bets (as implied in front-end bond yields) were conspicuously unmoved. Indeed, financial markets continue to price in at least 25 basis points in RBNZ easing over the next twelve months and see a 28 percent probability of a cut at next month’s meeting.
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