New Zealand Q4 inflation data due tomorrow – preview

<p>New Zealand Q4 inflation data is due Wednesday, 24 January 2024 local time in New Zealand:</p><ul><li>at 2145 GMT, 1645 US Eastern time (on Tuesday, 23 January 2024) </li></ul><p>Extracts from the CPI preview from Kiwi Bank:</p><ul><li>expect consumer prices rose a relatively soft 0.5% over the quarter</li><li>Annually, we see inflation decelerating to 4.6% from 5.6% – the lowest since June 2021. Our estimate is softer than the RBNZ’s. </li><li>According to the November round of forecasts, the RBNZ are expecting a 0.8% quarterly rise in prices and the annual rate falling to 5%. Given the data to date, risks to the RBNZ’s forecast appear tilted to the downside. And that’s great news for the RBNZ. Back in November, the RBNZ made very clear their zero tolerance to any upside surprises. Downside surprises they welcome. Upside surprises, not at all. </li><li>imported inflation may be falling, but it’s momentum can be easily disrupted. Shipping costs are on the rise, once again</li><li>Weakening imported inflation continues to do most of the leg work in bringing down headline inflation. Tradables, however, is out of the RBNZ’s control. The focus and the RBNZ’s primary concern is domestic (non-tradable) inflation. It’s domestic price pressures that they can influence. And a return to the RBNZ’s 2% target midpoint hinges on domestic inflation. </li></ul><p>—</p><p>The RBNZ next meets on February 28, at this stage an on hold decision is expected.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.