Synopsis:

ANZ sees risk appetite as a major challenge for NZD/USD, now trading around the 0.60 level. Upcoming Q3 labor data could shape the RBNZ’s rate cut decision, with a high unemployment print increasing the likelihood of a larger cut, potentially driving AUD/NZD higher.

Key Points:

• Labor Data Focus: Q3 labor market data (due Wednesday) is critical; a figure above the RBNZ’s 5% forecast may increase the probability of a 75bps cut.
• RBNZ Expectation: ANZ currently anticipates a 50bps cut at the November 27 RBNZ meeting, while a softer employment print could dampen further AUD/NZD rallies.
• AUD/NZD Seasonal Bound: While Q4 seasonality benefits both AUD and NZD, it typically supports NZD more, with 1.10–1.11 acting as a resistance level since 2013-14.

Conclusion:

ANZ expects next week’s  NZ labor data critical for determining RBNZ policy. A high unemployment print could prompt a larger rate cut, potentially pushing AUD/NZD higher but capped within established seasonal boundaries.