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15 Jul 2013
Flash: NZ CPI bottomed, RBNZ to hike sooner rather than later - BNZ
FXstreet.com (Barcelona) - On Tuesday, the New Zealand Bureau of Statistics is scheduled to publish the latest inflation data at 22.45GMT, with the market looking for a Q2 CPI of 0.3% MoM and 0.8% YoY.
According to Stephen Toplis, Head of Research at Bank of New Zealand, "Whatever the precise outcome of Tuesday’s Q2 CPI, it will likely mark the proximate low in its annual rate of inflation. Its subsequent pick up, starting Q3, will help reinforce the more general, and important, story that core inflation pressures are beginning to build and so the Reserve Bank needs to start normalizing its interest rate settings sooner rather than later."
Even if the data looks to be low, in view of Toplis, "The most important reason to not get too captured by the likely low-looking CPI for Q2 is that it won’t deny the build-up in core inflation pressures that’s occurring", adding that "While even trimmed-means and weighted-medians can’t help but be infected by the high exchange rate’s dampening influence, even these mechanical measures have hardly been very low. At worst they are just a bit below middling."
According to Stephen Toplis, Head of Research at Bank of New Zealand, "Whatever the precise outcome of Tuesday’s Q2 CPI, it will likely mark the proximate low in its annual rate of inflation. Its subsequent pick up, starting Q3, will help reinforce the more general, and important, story that core inflation pressures are beginning to build and so the Reserve Bank needs to start normalizing its interest rate settings sooner rather than later."
Even if the data looks to be low, in view of Toplis, "The most important reason to not get too captured by the likely low-looking CPI for Q2 is that it won’t deny the build-up in core inflation pressures that’s occurring", adding that "While even trimmed-means and weighted-medians can’t help but be infected by the high exchange rate’s dampening influence, even these mechanical measures have hardly been very low. At worst they are just a bit below middling."