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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
RBNZ
The RBNZ has released research on the importance of inflation expectations when forecasting the CPI. It finds that its headline inflation projections are more accurate when expectations are included and that the 1-year mean household inflation expectations have the best forecasting power. But the difference between it and other measures is small, as the charts below show.
- Consumer inflation expectations have been stuck above 7% since Q2 2022 and ticked up again to 7.4% in Q2 2023, close to the 7.5% recent peak. This is likely to concern the RBNZ given the predictive power for inflation and will be monitored closely.
- Simple correlations show that while 1-year business and consumer inflation expectations are very similar with headline inflation, consumer has a better fit with underlying inflation.
- See analysis here.
NZ CPI y/y% vs inflation expectations
Source: MNI - Market News/Refinitiv
NZ core CPI y/y% vs inflation expectations
Source: MNI - Market News/Refinitiv
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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