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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.
NZD
New Zealand's inflation remains red hot, with consumer prices up 5.9% Y/Y in the final quarter of 2021. Inflation accelerated to its fastest pace since 1990 and topped the consensus forecast of +5.7%, which matched the projection from the RBNZ's November MPS. Stats NZ commented that "price increases were widespread with 10 out of 11 main groups in the CPI basket increasing in the year," which highlights the broad-based nature of current inflationary pressures.
- The data has not moved the needle on RBNZ pricing to any observable degree so far. Note that the RBNZ will publish their preferred measure of core prices (sectoral factor model) at 15:00NZDT/02:00GMT.
- The report has overshadowed the latest developments on the Covid-19 front. Modelling from the Institute for Health Metrics and Evaluation suggests that New Zealand's daily Covid-19 cases could peak around 80,000 in mid-Feb. Meanwhile, the government said they have been preparing for up to 50,000 cases a day.
- The release of ANZ Consumer Confidence on Friday will conclude local data releases this week.
- NZD/USD has stabilised after dropping Wednesday in the wake of a hawkish pivot from the Fed, with Chair Powell noting that policymakers must be "nimble" to tackle the inflation threat. The rate last operates +6 pips at $0.6659.
- Bears look for a dip through a fresh cycle low of $0.6638 printed on Wednesday, before taking aim at Nov 2, 2020 low of $0.6589. Bulls need to retake Jan 19 high of $0.6812 to get some reprieve.
Fig. 1: New Zealand CPI Y/Y (%)
Source: MNI - Market News/Bloomberg
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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