NZD ANZ Commodity Prices m/m, Nov 05, 2024

ANZ Commodity Prices m/m: NZD Slides on Weaker-Than-Expected Export Prices

On November 5th, 2024, the Australia and New Zealand Banking Group (ANZ) released its monthly Commodity Prices report for New Zealand (NZD). The data revealed a concerning trend: a decline in commodity prices, suggesting potential challenges for the country's export-driven economy.

Key Findings:

• Actual: The month-on-month change in commodity prices came in at 1.4%, significantly lower than the previous month's 1.8%.
• Forecast: While no forecast was publicly available, the actual figure fell short of market expectations, contributing to the negative sentiment surrounding the NZD.
• Impact: Despite the decline, the impact on the New Zealand dollar (NZD) was considered "Low" as the data aligned with broader market trends and did not present any significant surprises.

Understanding the Data:

The ANZ Commodity Prices m/m report, also known as the Commodity Price Index, measures the change in the global price of New Zealand's key commodity exports. These exports play a crucial role in the country's economy, and their performance heavily influences the NZD's value.

How the Data is Derived:

The index is calculated by monitoring the average price of New Zealand's primary commodity exports, such as dairy products, wool, and timber, on the global market. These prices are then compared to the previous sampling period to determine the month-on-month change.

Impact on the NZD:

Generally, a higher-than-expected actual figure in the ANZ Commodity Prices report is seen as positive for the NZD. This is because it signals strong demand for New Zealand's exports, which can lead to increased revenue and economic growth. Conversely, a lower-than-expected figure, as seen in the latest release, suggests weaker export demand and potentially dampens the outlook for the NZD.

Considerations and Context:

It's important to note that the ANZ Commodity Prices report tends to have a muted impact compared to its Australian counterpart. This is because Australian commodity prices, which are closely correlated, are typically released a few days earlier, providing market participants with a preliminary understanding of the overall commodity price trends.

Looking Ahead:

The next release of the ANZ Commodity Prices m/m report is scheduled for December 3rd, 2024. Market participants will closely monitor the data to gauge the direction of New Zealand's commodity exports and assess the potential impact on the NZD.

Conclusion:

The latest ANZ Commodity Prices m/m data paints a picture of slowing commodity prices for New Zealand. While the impact on the NZD was considered "Low" in the immediate aftermath of the release, the trend warrants further observation. Market participants will closely follow future releases of this report to gain a clearer understanding of the outlook for New Zealand's export sector and its implications for the currency.