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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.
AUSTRALIA
Australian and NZ headline inflation have a correlation of over 90%, thus today’s NZ Q4 CPI suggests that there could be significant moderation in Australia’s when it is released on January 31. This is also in line with the 4.6% October/November average of the monthly CPI series. But just like in NZ, the details will be important, and NZ saw persistently sticky domestically-driven non-tradeables and core inflation in Q4. Just as with the RBNZ, this would make the RBA cautious when it meets in February.
- The correlation between the two countries’ non-tradeables inflation is around 90% and even higher for underlying measures. NZ’s non-tradeables inflation remained elevated and well above headline at 5.9% down from 6.3% in Q3.
- The RBNZ’s measure of core moderated to 4.5%, below headline, but core non-tradeables was stubbornly higher at 5%, down only 0.2pp.
- Services are a focus for the RBA given prices are significantly impacted by wages. NZ services inflation remained elevated but eased considerably to 4.7% from 5.6%.
Australia vs NZ non-tradeables CPI y/y%
Source: MNI - Market News/ABS/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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