Westpac See Less Chance Of November Hike Post Q3 CPI

The local bank weighs in on the outlook for the RBNZ post today's Q3 CPI print.

"The September quarter CPI report points to a faster easing in aggregate inflation pressures than we or the RBNZ had been expecting. But under the surface we see that core inflation pressures remain strong. The weakness in inflation is heavily centred on imported prices (tradables). Much of the softness in these areas reflects a continued easing in early supply disruptions offshore. Importantly non-tradables inflation remains strong and is up 6.3% over the past year and 1.7% for the quarter."

"Against this backdrop the chance of a further rate hike from the RBNZ in November is less likely. We will be looking more closely at this as we delve more deeply into the data today. The extent to which core inflation pressures continue to ease rapidly in the December quarter and beyond will be critical in determining the likelihood and timing of rate increases next year. Certainly, the persistence in domestic price pressures means the RBNZ won't be contemplating cuts any time soon."