NZ CPI preview: will it force hand of the RBNZ?- ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Analysts at ANZ explained that markets are clearly looking for the CPI to be the possible catalyst (or not) to lock in another OCR cut by the RBNZ for next week.

    Key Quotes:

    "With inflationas low as it is (0.1% y/y to Q4 2015), the RBNZ has very little wriggle room for downside surprises. Especially given that it seems that past inflation
    outcomes are now believed to have a greater bearing on wage and pricesetting
    outcomes than previously thought.

    In addition to a mixed inflation picture, evidence of capacity constraints in some pockets, booming regional housing markets, and a resurgent Auckland market mean that even though our NZ economists are still forecasting the OCR lower, they are a little wary of the trade-offs a lower OCR brings."
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