Dairy auctions and the New Zealand dollar

[Fairman]

Dairy auctions and the New Zealand dollar

Every two weeks, the Global Dairy Trade auction sets benchmark prices for milk powder and other dairy products. New Zealand is a major exporter, and the result moves NZD.

The auction takes place in the early hours of the morning in Europe and the evening in the Americas. Results come out as the auction rounds close. The price index change is the key figure.

NZDUSD reacts. The size of the move depends on the surprise relative to expectations. A big miss can push the pair 30 to 40 pips in a minute, with wide spreads and thin liquidity.

The unusual part is the lead-in. The auction takes place in several rounds, and the results of each round leak out. Markets sometimes begin moving before the final figure.

For a retail trader, it's a niche event that most calendars skip. The date schedule is public, and a calendar note is easy to add.

The reward for watching it is not profit but avoidance. A position in NZDUSD held through an auction is exposed to a move that no chart analysis predicts.

Is the Global Dairy Trade date on the trading calendar, and has it ever caught a position out?