New Zealand CPI data higher than expected – KiwiBank says RBNZ will take comfort

<p>The New Zealand Q2 inflation data was published earlier from Stats NZ:</p><ul><li><a href="https://www.forexlive.com/news/new-zealand-q2-cpi-11-qq-vs-expected-10-20230718/" target="_blank" rel="follow" data-article-link="true">New Zealand Q2 CPI 1.1% q/q (vs. expected 1.0%)</a></li></ul><p>NZD/USD was marked up, but if you check out your charts you'll see it wasn't sustained:</p><ul><li><a href="https://www.forexlive.com/centralbank/nzd-marked-higher-after-nz-cpi-data-higher-than-expected-20230718/" target="_blank" rel="follow" data-article-link="true">NZD marked higher after NZ CPI data higher than expected</a></li></ul><p>ASB response:</p><ul><li><a href="https://www.forexlive.com/centralbank/new-zealand-cpi-data-higher-than-expected-asb-sees-rbnz-staying-on-sidelines-20230719/" target="_blank" rel="follow" data-article-link="true">New Zealand CPI data higher than expected – ASB sees RBNZ staying on sidelines</a></li></ul><p>KiwiBank now:</p><ul><li>some good news on inflation</li><li>Inflation has peaked, globally. We are simply importing less inflation. This is great news. The world war on inflation is being won, albeit slowly.
</li><li>Imported inflation eased from 6.4% to 5.2%. That was the pleasant surprise.</li><li>Domestically generated inflation, esp. construction related prices, remains sticky</li><li>Core measures of inflation, which strip out volatile stuff, came in lower at 6.1%, down from 6.5%. This is a positive shift lower.
</li><li>We’re confident we’ve seen the peak in inflation, with the annual rate comfortably below the 7.3% peak at 6.0%. The peak in inflation will mark the peak in interest rates, locally and abroad.</li><li>The RBNZ will take comfort in today’s report. The RBNZ had forecast an easing in price pressures to 6.1% – so pretty much in-line.</li><li>We expect the next move from the RBNZ will be a rate cut. And we’ve pencilled in a move in February. By then, we are likely to be in the middle of a mild recession. A recession engineered by the RBNZ, to tame inflation. </li></ul><p>I posted this moments ago ICYMI:</p>

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