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BREAKING: NEW ZEALAND ON THE BRINK OF A TRIPLE-DIP RECESSION!
Hold onto your wallets, folks! The New Zealand economy might have kicked off 2023 with a decent growth spurt, but whispers from the shadows say it’s about to nosedive straight off a cliff! The current dire signals raise an urgent question: will the Reserve Bank of New Zealand (RBNZ) have to slash rates into the depths of despair to save us from a catastrophic triple-dip recession?
DISASTROUS DATA REVEALS ECONOMIC MELTDOWN!
In jaw-dropping revelations, the latest BNZ manufacturing and services indices scream trouble! Economists are sounding the alarm bells, pointing to a nightmare scenario reminiscent of past economic horrors. BNZ analysts didn’t hold back, declaring, “The combined services and manufacturing data look nothing short of disastrous! It’s the perfect storm for MORE central bank stimulus!”
Let’s face it, if you’re not glued to every nuance of the New Zealand economy, getting an accurate read on what’s happening is like finding a needle in a haystack. That’s why these BNZ surveys are gold—trusted indicators for market movement, and right now, they’re flashing warning signals!
MANUFACTURING SECTOR CRASHES: JOBS AT RISK!
Take a gander at the fresh BNZ report, and it’s clear: after a hopeful start to 2023, the manufacturing sector took a nosedive in May. New orders have plummeted sharply, and the employment figures took a staggering hit—marking the SINGLE LARGEST drop in TWO DECADES! The overall PMI has crashed from a respectable 53.3 to a shocking 47.5!
SERVICE INDUSTRY SLUMPS: DANGER LOOMS!
If that wasn’t enough, the services sector—our economic heavyweight—just tanked with the BNZ PSI plummeting to 44.0, a figure firmly planted in recession territory! Sales and new orders are collapsing like a house of cards, sending shockwaves through the economy!
This week, we’ll get a tantalizing peek at New Zealand’s Q1 growth figures, expected to clock in at a measly 0.7%. But with such dire BNZ readings, the hope for recovery is fading faster than a mirage in the desert, leaving everyone clinging to the edge of their seats!
MARKET WATCH: CAN RBNZ STEER US AWAY FROM A DISASTER?
For now, the markets are holding their breath, betting on the cash rate to settle at 3%. But don’t count on any more rate cuts just yet! The RBNZ isn’t expected to budge when they meet this July. But don’t be fooled! If economic activities continue to spiral downwards, the call for a string of cuts might just become unavoidable!
It’s a precarious balancing act as geopolitical tensions loom large and risk appetite sways! No surprise that the Kiwi dollar plummeted last Friday—being a small nation tied to global performance isn’t easy!
NZD/USD IN UPWARD TREND… FOR NOW!
Friday’s market showed a risky reversal for NZD/USD, threatening a downturn as momentum shifts from bullish to uncertain. After a slight dip, the currency pair has bounced back, but all eyes are on what comes next! Watch for key levels around .6000—any breaks below, and we might be in real trouble!
The upward climb seems tough above .6050. A retest of the June 5 high at .6080 will be challenging! But if we clear that, eyes will turn to .6110 for crucial support AND resistance!
