4 Jul 2013
Flash: Friday payroll data looms – NAB
FXstreet.com (New York) - According to the NAB Research Team, “Friday payrolls report is seen to dictate the higher end of near-term trading ranges in bond yields.”
As such, investors appear to be on the sidelines, hesitant to take on new risk. In Australia, the RBA statement and Governor’s speech were seen as being on the dovish side and as a result the OIS curve is pricing 60% chance of 25bps cut in August. “This pricing is seen to be fair, however is data dependent.” they add.
Next week we get some key data releases with NAB business survey and labor force and then Q2 CPI on July 24th. In New Zealand there is not a lot on the immediate horizon to impact short-end pricing, which has stabilized at around 55bps of RBNZ hikes for the year ahead. The real test of the market’s mettle may come with the release of Q2 CPI on 16 July, which we expect to remain below the bottom of the RBNZ’s 1-3% target band. However, we would use any consequent pullback in yields as an opportunity to pay OIS or to re-establish short duration trades.
As such, investors appear to be on the sidelines, hesitant to take on new risk. In Australia, the RBA statement and Governor’s speech were seen as being on the dovish side and as a result the OIS curve is pricing 60% chance of 25bps cut in August. “This pricing is seen to be fair, however is data dependent.” they add.
Next week we get some key data releases with NAB business survey and labor force and then Q2 CPI on July 24th. In New Zealand there is not a lot on the immediate horizon to impact short-end pricing, which has stabilized at around 55bps of RBNZ hikes for the year ahead. The real test of the market’s mettle may come with the release of Q2 CPI on 16 July, which we expect to remain below the bottom of the RBNZ’s 1-3% target band. However, we would use any consequent pullback in yields as an opportunity to pay OIS or to re-establish short duration trades.