New Zealand inflation data (the Q3 CPI) has been released, and the data can be found here: New Zealand inflation data: CPI for Q3 +0.3% q/q (vs. +0.5% q/q expected)
With the benign result, market thoughts are turng to what it means for the RBNZ rate hike schedule. In a nutshell … the further slowing of inflation gives RBNZ governor Wheeler scope to keep the official cash rate unchanged for longer
Comments from the Bank of New Zealand:
- “Lower inflation means a lower interest-rate track
- The RBNZ has set itself a very high hurdle before it resumes rate increases.
- We believe that it will be September next year before such evidence is clear.”
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- Bloomberg data shows “There is about an 80 percent chance of the benchmark being unchanged or lower by June”
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ANZ':
- CPI data points to RBNZ being “clearly on hold” and for “an extended period”
- ANZ forecast the next OCR hike in December 2015 … the risk is that extends into 2016
- Details of Q3 inflation were benign
- Few signs of intensification of generalized inflationary pressure outside of the housing group
