The miss on every major measure is likely to weigh on the New Zealand dollar and trim pricing for a December rate hike. The kiwi was already near a cycle low against the Australian dollar after last week’s RBNZ hold, and the gap with a more hawkish RBA now looks set to widen. The weak jobs figures argue against tightening, but the RBNZ’s hawks have focused on core inflation and fuel costs. A labour market miss alone may not settle the debate, so inflation expectations surveys later this month carry extra weight. Front-end swap rates are the market to watch for how far hike bets are pared. --- Banks called the peak in New Zealand unemployment, but the labour market went the other way, and the RBNZ’s December hike now looks a harder sell.
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