🇳🇿Cable FX Macro Weekly Note: New Zealand Q4 CPI

**As seen in Risk In The Week report 01/20/23, cablefxm.co.uk/reports

Inflation figures in New Zealand accelerated to 2.2% Q/q and 7.2% Y/y. Food jumped by 4.1%, housing rose 2.3%, transport increased by 1.7%. The main contributor to the quarter was food prices at 0.735 percentage points, followed by 0.642 percentage points. Trimmed-mean measures of inflation ranged from 6.4% to 7.0% Y/y, CPI excluding food group, household energy subgroup, and vehicle fuels increased 6.3 percent. The desk at ANZ sees the annual rate coming in flat at 7.2%, they note this would be less than the 7.5% forecast expected by the RBNZ back in November. However, they see tradable inflation rising to 6.9% Y/y in Q4, up from the prior record high of 6.6%, they add that core inflation can continue to increase even as the headline stays flat, so there is little to celebrate on the release. On the RBNZ, the desk sees a second 75bp OCR hike at the 22 February meeting and a rate peak of 5.75% reached by May.