New Zealand inflation data is expected to support the RBNZ on-hold monetary policy

<p>The data is due at 10.45am New Zealand time:</p><ul><li>2245 GMT</li><li>6.45pm US Eastern time</li></ul><p>BNZ snippet preview of the data:</p><ul><li>For the Q2 CPI release, the consensus sees inflation again
coming in under RBNZ estimates, at 0.9% q/q and 5.9%
y/y. </li><li>The data should reinforce the view that both headline
and underlying inflation are heading lower, supporting the
RBNZ’s on-hold stance.</li></ul><p>And, from ANZ, again in brief:</p><ul><li>The June quarter CPI figures are released next Wednesday. We expect annual
inflation to decline to 5.9% in Q2 2023, below the RBNZ’s May MPS forecast
of 6.1%. </li><li>Services inflation is where to look for the impact of wage growth, given the
services sector is relatively labour-intensive. Like non-tradables, services
inflation was still accelerating in Q1. We’ll be looking for a turning point in this
measure in Q2, and also a broad moderation in key core measures of
inflation, to give us confidence that underlying inflation has passed its peak.</li><li>All up, the Q2 CPI release is expected to show things moving in the right
direction. But that doesn’t necessarily mean the RBNZ has done enough to
get on top of medium-term sticky domestic inflation risks. It’s very unlikely
these data will give the RBNZ enough of a signal to challenge their watch,
worry, and wait strategy, but the market may well disagree with that
assessment on the day</li></ul>

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