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New Zealand data and the thin evening book

Some of the most dramatic New Zealand releases land when Europe is asleep and New York is winding down. Employment, inflation, and the Reserve Bank's decisions arrive during the Wellington morning, which falls in the New York late afternoon or evening depending on the season.

NZDUSD reacts quickly, and so do the crosses. But the book is thin. A surprise can move the pair 40 or 50 pips in seconds, with spreads of 5 to 10 pips.

The moves also tend to extend. In a market with few participants, a push in one direction isn't absorbed quickly. A 30 pip jump can become 60 over the following ten minutes before any reversal.

Most brokers' calendar default settings show these events in server time, which is often not the local time of the trader. The result is a lot of surprise entries into the release.

Marking NZ and Australian releases on a separate calendar with a notification helps if the plan is to avoid them, or to trade them with open eyes.

During a New Zealand release, how far do NZDUSD spreads stretch on the account used here?

I got caught by this once with an RBNZ decision that I thought was the following evening because my platform showed server time. I had a small AUDNZD position open and the cross jumped further in a few seconds than it normally moves in a whole session. Not a disaster, but the slippage on the stop was enough to make me take the calendar seriously.

On my account NZDUSD normally sits under a pip during the European session. Around the employment and inflation releases I have seen it go out to 7 or 8 pips for close to a minute, and on one rate decision it touched 12 before settling. The crosses are worse, and NZDJPY can be almost untradable for the first couple of minutes.

What I do now is set phone alerts in my own time zone for anything from New Zealand or Australia, and I flatten anything with NZD in it twenty minutes before. If I want to trade the reaction, I wait until the spread has returned to normal for at least two minutes.