FXstreet.com (Barcelona) - Encouragingly, there have been some tentative signs that some world prices for NZ’s major primary products are turning for the better. Another small gain in October, as measured by ANZ’s commodity price index due for release on Friday, would add to the case. According to the BNZ Research Team, “This should flow through to NZ dollar prices in the month, given a more stable currency of late.”
Such moves are important not only for the agriculture sector but for policy too, as they tend to lead changes in retail pricing by a few months. Domestic food prices have fallen over the past year, after previous strong gains. “A return of upward pressure would not only add directly to the CPI, but likely influence inflation expectations, the type of which the RBNZ has just put a bit more emphasis on.” the team notes.
Such moves are important not only for the agriculture sector but for policy too, as they tend to lead changes in retail pricing by a few months. Domestic food prices have fallen over the past year, after previous strong gains. “A return of upward pressure would not only add directly to the CPI, but likely influence inflation expectations, the type of which the RBNZ has just put a bit more emphasis on.” the team notes.
