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🇳🇿❗️Cable FX Macro Weekly Note: N.Z. Q2 Consumer Prices

**As seen in Risk In The Week report 07/14/23, subcribe at

New Zealand consumer prices slowed to 6.7% Y/y in Q1 from the prior 7.2%, this came to miss expectations of 6.9%. The quarterly pace eased to 1.2% from the prior 1.4%, the market had been expecting a 1.5%. Non-tradables inflation printed at 1.7% Q/q from the prior 1.5%, tradables CPI fell to 0.7% Q/q vs the prior 1.4%. The second quarter release is set to rise by the lowest level since 4Q 2021, the data will further support the case of the RBNZ’s rate hike pause, the central bank kept the OCR unchanged at 5.5% this month. With the central bank confirming the current level of rates as the peak, the data will do little to change expectations, however, we will be hearing from the board in a month from today. The desk at ANZ noticed that at 5.9%, New Zealand headline inflation would be lower than the RBNZ’s forecast of 6.1%, they see 2Q tradables and non-tradables inflation slowing down to 6.4% and 5.3%, respectively. ANZ does not expect 2Q price data to move the needle for the RBNZ’s wait and hold strategy, nevertheless, they warned that non- tradables inflation will prove persistent later in the year. For this reason, ANZ continues to expect that the RBNZ will be hiking again in November.



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