I posted earlier on what is coming up in Australia with reference to the major US events to impact:

The US events will impact on the NZD too, of course, so do check that out.

Specifically on NZ, though, we will get inflation data for the April to June quarter. A reminder; we only get the official CPI results from NZ once a quarter, not monthly as is reported in so many other developed economies (Australian official CPI is quarterly also).

So, this is a big deal and will be a focus.

Q2 CPI is due on Tuesday 16 July 2018

  • Which is Monday 16 July 2018 at 2245GMT

Preview via ASB:

This week's Q2 CPI release … expected to show inflation pressures picking up pace.

  • We are expecting annual inflation to lift to 1.6% in Q2, before hitting 2% by the end of the year.
  • This is a sharp turnaround in inflation pressures. However, we remain confident that the RBNZ will stick firm to the current policy settings outlook ("up or down - as necessary"). This is because much of the lift is being driven by higher oil prices combined with the recent softening in the NZD.

The lift is more of a one-off than reflecting a rise in inflation pressures from firming domestic capacity pressures.

  • Accordingly, the RBNZ is likely to look through these moves. Indeed, we expect core inflation measures to highlight that underlying inflation pressures remain below the midpoint of the RBNZ's inflation target. Add to this the increase in downside risks recently (soft business confidence and trade tensions) and we still expect the OCR to be left on hold for some time yet (until November 2019).