Ardern To Provide Update On Covid Traffic Light Settings

PM Jacinda Ardern told the Labour Party caucus that the Omicron variant is "not insurmountable, but it is a different foe," as she asked colleagues to stay humble. Ardern delivered her remarks during the annual retreat of her party caucus, ahead of a Covid-19 press conference, due to commence around the top of the hour. The Prime Minister will use this occasion to provide an update on New Zealand's traffic light system settings, which currently have all regions at orange except Northland, which is at red.

• New Zealand's food price index jumped 0.6% M/M in December after a 0.6% fall recorded in November. The annual increase printed at +4.5% Y/Y, the fastest pace in more than a decade, which may add fuel to inflation expectations.
• Separately, job vacancies on Trade Me surged 51% Y/Y in 2021, highlighting the acute tightness of New Zealand's labour market. Trade Me said that last year saw "record-breaking listing numbers and salaries," which "is still very much the case as we enter the new year."
• The data came out after participants added some hawkish RBNZ bets on Wednesday, with money markets now pricing ~32bp worth of OCR hikes come the end of next month's MPC meeting. ANZ said they expect the OCR to reach its terminal level of 3% by Apr '23. They had earlier forecast the OCR peaking at 2% in the second half of this year.
• NZD/USD last sits at $0.6781, little changed on the day, after trimming some of its earlier gains into Wednesday's close. Bears need a fall through Jan 18 low of $0.6753 before targeting Jan 6 low of $0.6733. Conversely, a jump above Jan 13/Nov 25 highs would give bulls some fresh momentum.
• Looking ahead, BusinessNZ M'fing PMI will hit the wires on Friday.