In May, New Zealand good export rose 8.5% yoy to NZD 5.8B, hitting a record high. Import rose 7.6% yoy to NZD 5.5B. Trade surplus came in at NZD 264m, above expectation of NZD 200m. In particular, exports to China rose 29% yoy to NZD 1.5B led by rises in milk powder, beef, food preparations and logs.
Strong terms of trade reaffirms RBNZ’s stance to stand pat tomorrow. Yet, the central bank will likely maintain openness to further rate cut later in the year.
AUD/NZD dips through last week’s low as Kiwi jumps after the release. Choppy corrective decline from 1.0731 is still in progress for 61.8% retracement of 1.0275 to 1.0731 at 1.0449. We’d pay attention to strong rebound from there to complete the correction from 1.0731. Break of 1.0550 resistance will turn bias back to the upside. However, sustained break of 1.0449 will pave the way to 1.0275 support next.
