There is more inflation data to come from New Zealand later - RBNZ's own preferred measure

We just had the CPI data from Stats NZ:

• New Zealand Q1 CPI 1.2% q/q (vs. 1.7% expected)

Which hit the NZD:

• NZD/USD marked down following lower than expected (but still elevated) NZ CPI data

Later in the session we'll get the Reserve Bank of New Zealand's own inflation measure, its "Sectoral factor model". The RBNZ don't list a time for the release but around 0300 GMT is usually about right (3pm NZ time, 11pm US Eastern time).

Pic is from the RBNZ website and shows the data as of the December 2022 quarter.

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What is the Sectoral factor model? In brief:

• The model is based on the idea that inflation in each sector of the economy is influenced by a common set of underlying factors or "factors" such as changes in interest rates, exchange rates, and commodity prices.
• The model describes how inflation in each sector of the economy is affected by the underlying factors. Estimates are derived from data on past inflation rates and other relevant indicators and are used to generate forecasts for future inflation in each sector.
• The RBNZ sectoral factor model of inflation is particularly useful because it allows the central bank to identify the sources of inflationary pressures in different parts of the economy. For example, if inflation is rising rapidly in the housing sector, the RBNZ can use the model to determine whether this is due to changes in interest rates or other factors specific to the housing market. By understanding the sources of inflationary pressures, the RBNZ can adjust its monetary policy to target inflation effectively and achieve its inflation targets.