Free Trial

Underlying Non-Tradeables Inflation Also Sticky

NEW ZEALAND

The RBNZ’s sectoral factor model estimate of core inflation eased to 4.3% y/y in Q1 from the upwardly revised 4.7% in Q4. It remains elevated and above headline inflation but is steadily moving in the right direction. The CPI report released earlier today showed that domestically-driven non-tradeables inflation remains sticky with the work in bringing down overall price pressures being done by tradeables. The RBNZ’s sectoral factor model results are consistent with this and this problem is likely to mean that rates are on hold through most of if not all of 2024.

  • Non-tradeables inflation rose 5.8% y/y in Q1 down only 0.1pp on the quarter. Underlying non-tradeables also eased 0.1pp but is below the headline at 5.2% and is only 0.3pp below the Q2 2023 peak.
  • Underlying tradeables inflation moderated 0.7pp to 1.7% y/y in line with the headline measure.
NZ underlying inflation y/y%

Source: MNI - Market News/RBNZ

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.