NZD traders - RBNZ core inflation data published now, +1.8% y/y in Q2

Author: Eamonn Sheridan | Category: Central Banks

We had the CPI data from New Zealand earlier today:

Reserve Bank of New Zealand publish their own measure of inflation
  • The RBNZ's key measure of core inflation is 'the sectoral factor model'
  • comes in at  1.8% (prior was 1.8% also)
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The Sectoral Factor Model Inflation Gauge, in brief (summarised this from RBNZ info)
  • Core inflation excludes one-off or highly volatile price movements
  • Central banks use core inflation measures to assess what is happening to "underlying" inflation
  • The Reserve Bank of New Zealand has a set of models that produce core inflation estimates
  • The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach , estimating core inflation based on two sets of prices: prices of tradable items, which are those either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports


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