Australian inflation data for Q4 is due next week (31 January)
The NZ data is here (and follow ups):
- NZ Q4 CPI: 0.1% q/q (expected 0.4%)
- NZD after the inflation data ... No soup for you!
- Ladies and gentlemen trading the NZD ... MOAR inflation data to come today!
OK ... looking ahead ... what are the implications of the big miss today from NZ inflation for the Australian reading due next week? A big miss to come?
I've seen analysts on both sides of the answer:
- No! No implications
- Yes! Implications!
ANZ:
- NZ Q4 CPI out this morning - be careful looking to this as a guide to Aussie CPI
- Both baskets are dominated by non-tradable items, and even the direction of forecast misses is inconsistent
Westpac:
- NZ CPI 'often' gives a bias for Australian CPI, especially when it deviates from expectations.
- Well it did deviate from expectations today; coming in at 0.1% versus 0.4% exp.
- Surprises were across board in tradable sector suggesting downside risks for next week's Australian data
I'm leaning towards the WPAC interpretation right now ... "especially when it deviates from expectations"
Its the "surprises were across board in tradable sector" that has tipped me WPAC's way.
