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.
The Reserve Bank of New Zealand could consider a more hawkish 75bp hike at its November meeting and ultimately drive its terminal rate to 5.25% after September quarter Consumers Price Index data printed hotter than expected.
Quarterly inflation accelerated to 2.2% q/q in the September quarter, up from 1.7% q/q the prior quarter, even as the year-on-year rate dipped to 7.2% from 7.3% in June, according to StatsNZ. Non-tradable inflation hit a record high of 6.6% y/y. Housing-related costs and food prices were the main driver of the CPI increase. The RBNZ's August Monetary Policy Statement had forecast annual CPI inflation of 6.4% for the September quarter.
Evidence of persistent inflation puts a 75bp hike to 4.25% on the table when the RBNZ next meets on November 23 after five consecutive hikes of 50bp. The RBNZ's sectoral factor inflation model released on Tuesday accelerated to 5.4% y/y in the September quarter, up from 5.2% y/y. (See MNI STATE OF PLAY: RBNZ Hikes 50bp, No Slowing Down in 2022)
Expectations for the RBNZ's terminal rate were repriced by traders, with Overnight Indexed Swaps indicating a terminal rate of 5.25% in May. About 70bp of tightening has been priced in for November. (See STIR : RBNZ Dated OIS Pulls Higher After CPI, Sell-Side Get More Hawkish) The prospect of more hawkish policy powered a strong rally in the kiwi. (See FOREX : NZD Soars As Hot CPI Print Boosts OCR-Hike Bets, GBP Gains On Potential For BoE QT Delay)
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.