Earlier today we had the official CPI data from Stats NZ:
The New Zealand Q2 inflation data was published earlier from Stats NZ:
- New Zealand Q2 CPI 1.1% q/q (vs. expected 1.0%)
- NZD marked higher after NZ CPI data higher than expected
Responses:
And, a few minutes ago we had from the Reserve Bank of New Zealand:
ANZ posted their response prior to the RBNZ data, in brief:
- Annual CPI inflation decelerated from 6.7% in Q1 to 6.0% in Q2, a little stronger than our forecast of 5.9%, but slightly below the RBNZ’s May MPS forecast of 6.1%. That was where the good news ended for the RBNZ, however, with an unwelcome upward surprise in the key nontradable's inflation component.
- Non-tradables inflation came in at 6.6% y/y, stronger than the May MPS forecast of 6.3% y/y and our forecast for 6.4%. And the upward surprise was broad-based, rather than reflecting unexpected moves in one or two components.
- Core inflation measures were mixed.
- Tradables inflation (largely imported) came in at 5.2% y/y (6.4% previously), well below the RBNZ’s forecast of 5.8%, but largely reflecting base effects (as rising fuel prices in the wake of the war in Ukraine fell out of the annual calculation), as well as an expectedly sharp fall in international airfares.
- All up, these data show that risks to the inflation outlook remain firmly to the upside. While annual headline inflation fell sharply, which is helpful for inflation expectations, the details suggest persistence in nontradables inflation, with associated potential medium-term challenges.
- We maintain our forecast that the RBNZ is not in fact done hiking yet, with a 25bp hike pencilled in for November
Bolding above is mine.
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NZD/USD is sitting near its session low after the CPI spike earlier:
