MNI: US Consumers See Lower Inflation, Better Jobs - NY Fed

MNI BRIEF: Risks To Growth Evident, Await Dec Forecasts -Rehn

MNI China Daily Summary: Tuesday, November 12

MNI BRIEF: Prolonged Tightening If Expectations Worsen - BCB

MNI: PBOC Net Injects CNY107.2 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1927 Tues; +1.32% Y/Y

EZ/UK Bond Supply Calendar: IT, UK, DE, PO Auction Wednesday

MNI: US REDBOOK: NOV STORE SALES +4.8% V YR AGO MO

MNI: CANADIAN SEP BUILDING PERMITS +11.5% MOM

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

NEW ZEALAND: VIEW: Westpac Sees More Gradual RBNZ In 2025 Due To Inflation Risks

NEW ZEALAND
APACNew ZealandBulletGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

While near-term inflation expectations from the RBNZ’s business survey for Q4 were lower, those further out were slightly higher. Westpac doesn’t think this will be a problem for the RBNZ and that inflation expectations “look consistent with the RBNZ’s medium-term inflation target”. It believes that the expectations data with other recent releases are consistent with the RBNZ cutting rates 50bp to 4.25% on November 27.

  • Westpac believes that “today’s survey and other recent data will leave the RBNZ feeling comfortable that pricing behaviour is now well aligned with their medium-term target”.
  • “The lift in longer-term inflation expectations follows sharp falls last quarter and leaves them at levels that are still close to the RBNZ’s target.”
  • “But even with inflation expectations looking well contained, today’s survey highlights that the risks for inflation are not all in one direction.”
  • “While inflation has fallen sharply over the past year (especially in relation to import prices), we are still seeing strong increases in some domestic costs (like local council rates and insurance chares). Those continued cost increases are limiting the decline in overall inflation. And with related risks for inflation expectations, such costs warrant continued close attention as we head into the new year.”
  • “We expect that the RBNZ will adopt a more gradual and data dependent approach to policy changes next year.”
216 words

To read the full story

Close

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.

While near-term inflation expectations from the RBNZ’s business survey for Q4 were lower, those further out were slightly higher. Westpac doesn’t think this will be a problem for the RBNZ and that inflation expectations “look consistent with the RBNZ’s medium-term inflation target”. It believes that the expectations data with other recent releases are consistent with the RBNZ cutting rates 50bp to 4.25% on November 27.

  • Westpac believes that “today’s survey and other recent data will leave the RBNZ feeling comfortable that pricing behaviour is now well aligned with their medium-term target”.
  • “The lift in longer-term inflation expectations follows sharp falls last quarter and leaves them at levels that are still close to the RBNZ’s target.”
  • “But even with inflation expectations looking well contained, today’s survey highlights that the risks for inflation are not all in one direction.”
  • “While inflation has fallen sharply over the past year (especially in relation to import prices), we are still seeing strong increases in some domestic costs (like local council rates and insurance chares). Those continued cost increases are limiting the decline in overall inflation. And with related risks for inflation expectations, such costs warrant continued close attention as we head into the new year.”
  • “We expect that the RBNZ will adopt a more gradual and data dependent approach to policy changes next year.”