NZ jobs data in focus as US tech stocks falter

Local employment figures will loom large today when Statistics New Zealand’s suite of jobs data are released, with economists watching for whether wage growth will return and add pressure on the Reserve Bank to join its Australian counterpart in raising interest rates.

The kiwi dollar clawed back some of Tuesday’s decline against the Aussie after the Reserve Bank of Australia’s governor Michele Bullock wasn’t so sure more hikes will be needed across the Tasman to tamp down those rising consumer prices.

Meanwhile, stocks on Wall Street declined with the tech-heavy Nasdaq Composite wearing the brunt as artificial intelligence firm Anthropic’s push into legal services knocked data companies and legal publishers on both sides of the Atlantic, such as S&P Global, London Stock Exchange Group and Thomson Reuters.

And earnings season continued with Palantir Technologies’ latest record quarter being well-received, while PayPal slumped 21% after switching out its chief executive and saying earnings will probably decline this year.

All in a day’s work

New Zealand’s unemployment rate is expected to stay at 5.3% when Stats NZ releases its household labour force survey today, with economists picking the first quarter of jobs growth in 18 months.

“Annual wage disinflation is seen nearing an end, as improving labour demand meets some difficulty in being satisfied,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Data along these lines would reinforce market expectations that the RBNZ may need to hike rates sooner than previously indicated when viewed against the string of other positive releases over the past couple of months.”

Bond traders have fully priced in a rate hike by New Zealand’s central bank at the October meeting, while bank economists largely brought forward their predictions for tighter monetary policy to the end of this year, having previously forecast a flat cash rate through 2026.

Across the Tasman, the Reserve Bank of Australia lifted its target cash rate 25 basis points to 3.85% yesterday, as expected, although governor Michele Bullock was less hawkish than the formal statement in her press conference, saying it wasn’t clear whether more tightening was needed to tame price rises.

The kiwi dollar rose to 86.22 Australian cents at 7am in Auckland from 85.91 cents yesterday, and traded at 60.43 US cents from 60.37 cents.

Australian futures are pointing to a marginally soft start to the trading day for the S&P/ASX 200 index when trading opens across the Tasman after a weak lead in the US and Europe.

The tech-heavy Nasdaq Composite was down 1.8% in late trading, while the S&P 500 fell 1.1% and the Dow Jones Industrial Average slipped 0.7%.

New ambitions

Data services firms and legal publishers were among those setting the subdued tone after AI firm Anthropic added new tools for legal users of its Cowork assistant, with S&P Global, LSEG and Thomson Reuters among those on the red side of the ledger.

Accounting software giant Intuit tumbled 12% while management consulting firm Gartner tumbled 22%, posting the steepest decline on the S&P 500.

ASX-listed Xero yesterday talked up its push into AI, with 2 million subscribers using its machine learning functions and more than 300,000 engaging with its generative AI tool.

Meanwhile, PayPal slumped 21% after the payments firm’s board replaced chief executive Alex Chriss with former HP boss Enrique Lores – effective from March – after saying earnings will probably decline this year.

The Walt Disney Co dipped after saying Josh D’Amaro, the current head of the experiences division, will succeed Bob Iger as chief executive on March 18, with Iger staying on to the end of the year as an adviser and board member.

Earnings season continued with Palantir among the day’s gainers after reporting its latest record quarterly revenue after the close of trading on Monday, ahead of Magnificent 7 members Alphabet and Amazon’s results later this week. Advanced Micro Devices is due to report after trading ends.

Brent crude oil futures rose 1.4% to US$67.25 a barrel after India agreed to stop buying Russian oil as part of a trade deal with the US, while precious metal prices recovered from their historic fall last week, with gold futures up 6.7% at US$4,965 an ounce.

The latest Global Dairy Trade auction was held overnight, but technical issues have delayed the platform from publishing the results.

Reporting by Paul McBeth. Image from Solen Feyissa on Unsplash.