Profit Mongers @ 3:14 PM, Wednesday December 21 2011
1645 NZ GDP q/q (+0.6% expected, +0.1% prior, +0.3% to +0.9% range)
Affliated Reports:
NZ GDP q/q (+2.2% expected, +1.5% prior, +1.6% to +2.5% range)
This News release is usually a good mover because it only comes out quarterly, thus making it
more likely there will be a surprise. Last time in September a -0.4 came with a +0.1 revision
(-0.2 y/y with +0.3 revision) and caused an initial 40 pip spike and after a 15 pullback over
2-3 minutes continued down form an additional 20-25 pips below the initial spike lows. July's
+0.5 came with a +0.3 revision (+0.9 y/y with +0.3 revision) and moved up 100 pips over 15 minutes
without any retracement. There was a bit of leak and it appears the move started the minute before
with a 35-40 pip spike, although things continued at the top of the hour when the news is normally
released. March was just +0.1 with no revision (+0.1 y/y with no revision) and only a quick 25
pip spike and just went flat. Last December was -0.3 with a -0.1 revision (-0.3 y/y and -0.1 rev)
which brought a 20-25 pip spike. This was on December 22nd and there would probably have been a
larger move if there was more volume in the market. We need to be aware of this since we are in a
similar trading condition now. So normally we would trade a +/-0.3 but would widen this out to
+/-0.4 because of this. Quickly check the y/y figures agree and exit if there is a significant
conflict.
--If it comes out at +1.0% or higher, NZD/USD should rally 40-50 pips.
--If it comes out at +0.2% or lower, NZD/USD should drop 40-50 pips.
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