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AUSTRALIA: NZ Q4 CPIs Signal Lower Australian Core But Upside Risks To Services

AUSTRALIA

Given the very high correlations between NZ and Australian CPIs and their major components, there is information to be gained about the upcoming Q4 Australian data on January 29 from NZ’s Q4 data. Given government electricity subsidies, it is difficult to compare the headline measures. But the NZ data suggest there will be further moderation in Australia’s trimmed mean inflation but possible upside risks to services, which is a particular focus of the RBA’s.

Australia vs NZ underlying CPI y/y%

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Given the very high correlations between NZ and Australian CPIs and their major components, there is information to be gained about the upcoming Q4 Australian data on January 29 from NZ’s Q4 data. Given government electricity subsidies, it is difficult to compare the headline measures. But the NZ data suggest there will be further moderation in Australia’s trimmed mean inflation but possible upside risks to services, which is a particular focus of the RBA’s.

Australia vs NZ underlying CPI y/y%

Keep reading...Show less