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Q3 CPI Points To Unchanged RBNZ Stance


Q3 CPI came in below RBNZ and consensus forecasts but remains elevated. It rose 1.8% q/q to be up 5.6% y/y down from 6% in Q2 driven by transport, council rates and rents. The RBNZ had projected 2.1% q/q and 6% y/y. The central bank said that it is focussed on the medium-term and so an upside surprise was unlikely to shift them but given this more moderate outcome their on hold “high for longer” stance is unlikely to change.

  • The domestically-driven non-tradeables CPI eased further rising a lower-than-expected 1.7% q/q with the annual rate moderating to 6.3% from 6.6% and a peak of 6.8% in Q1. It remains elevated but is moving in the right direction.
  • Services prices rose a strong 2.2% q/q but still eased to 5.6% y/y from 6.1%. This series is usually robust in Q3 due to the increase in government charges at this time.
  • Tradeables inflation came in a lot lower than expected at 1.8% q/q compared with Bloomberg consensus at 2.4%. It is now at 4.7% y/y down from 5.2% in Q2. Goods inflation rose 1.5% q/q to be 5.7% y/y and well off the Q2 2022 peak of 9%.
  • Food price inflation rose only 0.9% q/q, the lowest quarterly rate since Q4 2021, and eased to 8.8% y/y from 12.3%. This meant that CPI ex food rose 2.1% y/y and 5% y/y up from 4.6% in Q2, but the series is well off its peak. The RBNZ’s measure of core inflation is out later today and has been at 5.8% for the last three quarters and the ex food CPI may be signalling little change in Q3 core again.
NZ CPI y/y%

Source: MNI - Market News/Refinitiv

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