ANZ New Zealand expect RBNZ rate hike in February 2024, previously expected November 2023

<p>ANZ analysts say the weaker-than-expected inflation buys the RBNZ some time.</p><p>The data ICYMI:</p><ul><li><a href="https://www.forexlive.com/news/new-zealand-q3-cpi-18-qq-2-expected-20231016/" target="_blank" rel="follow" data-article-link="true">New Zealand Q3 CPI +1.8% q/q (+2% expected)</a></li></ul><p>ANZ, in brief:</p><ul><li>We now expect the RBNZ to hike the OCR 25bp in February, rather
than November.
</li><li>Annual CPI inflation decelerated from 6.0% in Q2 to 5.6% y/y in Q3,
weaker than our forecast of 6.1%, and below the RBNZ’s August MPS
forecast of 6.0%. The downside surprise was on the tradables side.
</li><li>Non-tradables inflation came in at 6.3% y/y, slightly above the August
MPS forecast of 6.2% y/y but below our forecast of 6.5%.</li><li>While still far too high, core inflation measures improved, which will be
pleasing for the RBNZ. CPI excluding food, fuel, and energy fell to 5.2%
y/y (6.1% previously). Trimmed mean measures largely eased. At the
30% trim level, inflation eased from 6.0% y/y to 5.6% y/y. Weighted
median inflation eased from 6.6% y/y to 5.0% y/y.
</li><li>Tradables inflation (largely imported) came in at 4.7% y/y (5.2%
previously), well below our forecast of 5.5% y/y and the RBNZ’s forecast
of 5.8% y/y. Petrol prices were higher, but not as high as we expected.
Petrol price moves will be looked through, at least as long as inflation
expectations continue to ease.
</li><li>The details of today’s data support our view that domestic-driven inflation
pressures remain a significant problem. However, clear progress was
evident, and that takes pressure off the RBNZ to move the OCR any time
soon. In short, ‘hope for the best’ remains a valid strategy. Accordingly,
we have pushed our forecast hike out to the next meeting, the February
Monetary Policy Statement.</li></ul><p>—</p><p>Upcoming Reserve Bank of New Zealand dates:</p>

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