New Zealand CPI data higher than expected – KiwiBank says RBNZ will take comfort

The New Zealand Q2 inflation data was published earlier from Stats NZ:

NZD/USD was marked up, but if you check out your charts you’ll see it wasn’t sustained:

ASB response:

KiwiBank now:

  • some good news on inflation
  • Inflation has peaked, globally. We are simply importing less inflation. This is great news. The world war on inflation is being won, albeit slowly.
  • Imported inflation eased from 6.4% to 5.2%. That was the pleasant surprise.
  • Domestically generated inflation, esp. construction related prices, remains sticky
  • Core measures of inflation, which strip out volatile stuff, came in lower at 6.1%, down from 6.5%. This is a positive shift lower.
  • We’re confident we’ve seen the peak in inflation, with the annual rate comfortably below the 7.3% peak at 6.0%. The peak in inflation will mark the peak in interest rates, locally and abroad.
  • The RBNZ will take comfort in today’s report. The RBNZ had forecast an easing in price pressures to 6.1% – so pretty much in-line.
  • We expect the next move from the RBNZ will be a rate cut. And we’ve pencilled in a move in February. By then, we are likely to be in the middle of a mild recession. A recession engineered by the RBNZ, to tame inflation.

I posted this moments ago ICYMI:

This article was written by Eamonn Sheridan at Source