AUD/NZD advances towards 1.1250 as focus shifts to Aussie Employment and NZ GDP data

• AUD/NZD is inclining higher towards 1.1250 on expectations of upbeat Australian payroll data.
• Higher consensus for Aussie Consumer Inflation Expectations may result in a fifth consecutive RBA rate hike.
• The NZ GDP is expected to display a mixed performance.

The AUD/NZD pair is displaying a perpendicular upside momentum after picking bids below 1.1200 in the Tokyo session. The asset is marching towards the critical hurdle of 1.1250 as investors have started discounting the higher consensus for Australian labor market data. Broadly, the cross is aiming higher after forming a bottom around 1.1120 last week.

The Australian economy is going through the headwinds of higher inflation and a meaningful decline in export numbers. Now, the entire focus is on employment data, which will release on Thursday. The jobless rate is expected to remain steady at 3.4%. While the Employment Change is expected to display an addition in employment generation by 35k. A release of upbeat Australian employment data will strengthen the aussie dollar further.

In addition to the employment data, the release of the Consumer Inflation Expectations will be of utmost importance. The inflation indicator is expected to land at 6.7%, significantly higher than the former print of 5.9%. An occurrence of the same will force the Reserve Bank of Australia (RBA) to step up its Official Cash Rate (OCR) by 50 basis points (bps) consecutively for the fifth time.

On the NZ front, the release of the Gross Domestic Product (GDP) numbers will hog the limelight. The annual data is showing a contraction in the kiwi economy by 0.2% against an expansion of 1.2%. While the quarterly data will result in an expansion of 0.8% vs. a contraction of 0.2%.