Analysts at ANZ note that the New Zealand’s headline CPI rose 0.9% q/q in Q3, which was above consensus and ANZ’s own expectation (0.7% and 0.8% respectively).
Key Quotes
“This saw annual inflation pick up to 1.9% y/y from 1.5% in Q2. Tradable prices rose 0.9% q/q (0.8% y/y), while non-tradable prices rose 0.8% q/q (2.6% y/y).”
“Directionally the majority of price moves were as expected. Petrol prices lifted 5.5% q/q (making a 0.3%pt contribution), pushed up by the lower NZD, higher global oil prices and increased fuel taxes.”
“Housing-related prices continued to hold up, with rents up 0.4% q/q and the purchase of housing (a proxy for building costs) up 1.3%.”
“Retail-related price moves remained on the softer side, consistent with the signal coming out of our ANZ Business Outlook Survey – competition is high and firms are finding it difficult to pass on costs.”
“Core and underlying inflation measures were broadly stable. The trimmed mean measures were either stable or rose a touch across various levels of trim in annual terms. The weighted median slipped 0.1%pts from Q2 to 2.2% y/y. In addition, we estimate that the proportion of the CPI basket with inflation running above 2% y/y ticked up to 39% from 37% in Q2. That is still well below its recent high of 49% in Q1 2017.”
“Today’s outturn was significantly stronger than the RBNZ’s August MPS forecast for a 0.4% q/q rise (1.4% y/y).”
“Overall, we think the RBNZ will be quick to look beyond Q3’s print towards the medium-term direction for economic activity and core inflation.”
Share
