Analysis from Kiwi Bank in New Zealand on the CPI data published earlier today:

  • The December quarter inflation report was slightly above market expectations, but below RBNZ expectations. The inflation rate held at 7.2%. And price pressures remain intense, for now.
  • There were some upside surprises in the basket, particularly airfares. The return of international tourists have enabled some chunky price hikes, with accommodation services up 14%yoy.
  • We are seeing the peak in inflation now. And the outlook for inflation, both offshore and onshore, is improving. The world war on inflation is being won.
  • We now expect the RBNZ to deliver a 50bp hike in February, a step back from the outsized (catch up style) 75bp signalled. We have seen more than enough to justify a reduction in the pace and extent of future rate rises. Enough is enough. A move to 5.5% is likely to be a step too far. We expect a move to 5%. Rates markets should react.

ANZ argue along similar lines:


The data ICYMI:


NZD/USD dribbling lower as the data digested:

nzdusd New Zealand cpi 25 January 2023