Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.
    2021
    Best News & Analysis Provider
    FxDailyInfo
    2022
    Best Forex Educational Resources Global
    International Business Magazine

    NZ CPI Preview: Forecasts from four major banks, inflation likely to take a step downwards

    Source Fxstreet
    Jan 23, 2024 15:48

    New Zealand’s Consumer Price Index (CPI) report for the fourth quarter (Q4) will be released on Tuesday, January 23 at 21:45 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of four major banks regarding the upcoming NZ inflation data.

    Headline CPI is expected to rise by 0.5% quarter-on-quarter vs. 1.8% in Q3, while the year-on-year rate is expected at 4.7% vs. the prior release of 5.6%. If so, it would be the lowest since Q2 2021. The RBNZ’s Q4 CPI projection is higher at 0.8% QoQ and 5.0% YoY.

    ANZ

    We expect annual CPI inflation to decelerate sharply to 4.7% YoY in Q4, below the RBNZ’s November MPS forecast of 5.0% YoY. However, the expected downward surprise versus RBNZ’s November forecast is driven entirely by the tradables component, which we expect to fall from 4.7% to 3.4% YoY. We expect non-tradable inflation of 5.7% YoY, in line with the RBNZ’s November forecast. Given the RBNZ’s focus on this component, it’s surprises here that will matter for the OCR outlook, particularly in context of the RBNZ’s impatience as expressed in the November Monetary Policy Statement. We see the risks as balanced around 5.7%. We expect the suite of core inflation measures to move materially lower. This is absolutely what the RBNZ needs to see, but we are cognisant that these measures are also influenced by weaker tradable inflation, whereas the RBNZ’s primary focus is domestic inflation risks.

    Westpac

    Inflation is set to again fall short of the RBNZ’s forecasts. We expect consumer prices to have risen by 0.5% in the December quarter, leaving them up 4.7% over the past 12 months. In contrast, the RBNZ’s last published forecasts assumed a 0.8% rise over the quarter (+5.0% for the year to December). Our lower inflation forecast reflects softness in the prices for volatile items like international airfares and food over the past quarter, as signalled by Stats NZ’s expanded suite of monthly price indicators. The bigger question is what’s happening to the underlying trend in prices. We expect most core inflation measures – including measures of domestic price pressures – will moderate, but remain at levels well above the RBNZ’s target range.

    TDS

    We expect Q4 CPI inflation to print on consensus at 0.5% QoQ (RBNZ: 0.8%), decelerating sharply from the 1.8% QoQ in Q3. This lifts the annual headline to 4.7% YoY, also much lower than 5.6% YoY last quarter. Food prices are likely to be a big drag this quarter, down 1.1% QoQ while petrol prices continue to be on the retreat. However, rent prices appear more sticky and could be a concern to the RBNZ, especially after it flagged that strong population growth poses upside risk to inflation. If CPI inflation does print below RBNZ's forecast, the RBNZ may scale back its hawkish rhetoric at the Feb meeting given the disappointing economic data (e.g., GDP, labour market) in Q4.

    ING

    We recently updated our estimates for the fourth quarter CPI in New Zealand, and expect a 0.4% QoQ print which translates into 4.6% YoY. Consensus is centred at 4.7%, signalling that expectations are for a marked undershot compared to the latest RBNZ fourth quarter CPI projections at 5.0%.

    Disclaimer: For information purposes only. Past performance is not indicative of future results.
    placeholder
    Fed's Barkin: Not in a hurry to cut ratesRichmond Federal Reserve Bank President Thomas Barkin said on Friday that he expects overall inflation numbers are likely to come down over the next few months, per Reuters.
    Source  Fxstreet
    Richmond Federal Reserve Bank President Thomas Barkin said on Friday that he expects overall inflation numbers are likely to come down over the next few months, per Reuters.
    placeholder
    RBNZ’s Hawkesby: Policy is going to stay restrictive for some time yetThe Reserve Bank of New Zealand (RBNZ) Deputy Governor Hawkesby said on Friday that interest rates in New Zealand need to stay restrictive for some time to ensure inflation expectations become fully anchored again while adding that the central bank was not in the position to consider cutting rates.
    Source  Fxstreet
    The Reserve Bank of New Zealand (RBNZ) Deputy Governor Hawkesby said on Friday that interest rates in New Zealand need to stay restrictive for some time to ensure inflation expectations become fully anchored again while adding that the central bank was not in the position to consider cutting rates.
    placeholder
    US Core PCE Preview: Forecasts from nine major banks, a hot readingThe Fed’s preferred inflation gauge, the Core Personal Consumption Expenditure (PCE), will be released by the US Bureau of Economic Analysis (BEA) on Thursday, February 29 at 13:30 GMT and as we get closer to the release time, here are the forecasts of economists and researchers of nine major banks.
    Source  Fxstreet
    The Fed’s preferred inflation gauge, the Core Personal Consumption Expenditure (PCE), will be released by the US Bureau of Economic Analysis (BEA) on Thursday, February 29 at 13:30 GMT and as we get closer to the release time, here are the forecasts of economists and researchers of nine major banks.
    goTop
    quote