New Zealand NZD

New Zealand Financial Stability Report

Impact:
Medium
Source: Reserve Bank of New Zealand

Next Release:

Date:
Period:
What Does It Measure?
The New Zealand Financial Stability Report measures the overall stability of the country’s financial system, focusing on areas such as banking sector health, the functioning of financial markets, and systemic risks to the economy. Key indicators assessed include capital adequacy, asset quality, liquidity of financial institutions, and exposure to economic shocks, providing insights into both national and sector-specific financial conditions.
Frequency
The report is released biannually, typically published in May and November, and represents a final figure after thorough analysis and data collection.
Why Do Traders Care?
Traders pay close attention to the Financial Stability Report as it provides vital information on the risks facing New Zealand's financial system, which can influence investor confidence and market sentiment. Any significant findings regarding financial vulnerabilities or recommended policy measures can temporarily affect the New Zealand dollar (NZD) and impact equity market performance.
What Is It Derived From?
The report is derived from comprehensive assessments conducted by the Reserve Bank of New Zealand, utilizing data collected from major financial institutions, including banks and insurers. Methodologies involve stress testing, surveys of financial stability, and qualitative assessments of financial conditions and risks.
Description
The Financial Stability Report includes both preliminary insights based on early data and final assessments, with preliminary data subject to revisions as new information becomes available. While it details the current state of stability in New Zealand's financial system, it also assesses potential threats arising from external and domestic economic conditions, providing a forward-looking perspective.
Additional Notes
This report typically serves as a coincident indicator of economic conditions, reflecting current risks while also hinting at potential future trends. The information presented can correlate with other regional economic indicators and global financial stability reports, forming a broader framework for understanding international economic dynamics.
Bullish or Bearish for Currency and Stocks
The impact of the Financial Stability Report can be classified as bullish or bearish depending on the tone and findings regarding financial vulnerabilities; however, this specific report's exact forecasts may not always be disclosed. Should the findings indicate improved stability and resilience against shocks, it would generally be bullish for the NZD and equities, fostering positive market sentiment.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number Better than forecast for the currency (or previous revise better)
Red Number Worse than forecast for the currency (or previous revise better)
Hawkish Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish Favors lower rates to boost growth, weakening the currency but lifting stocks.
Date Time Actual Forecast Previous Surprise