New Zealand CPI misses expectations, q/q clocks in at just 0.4

The New Zealand CPI came in below expectations, with the y/y CPI printing at 1.5% versus the expected 1.6% (last 1.1%), while the quarterly inflation reading came in at just 0.4% against the forecast 0.5%. The inflation readings missed broad-market forecasts, but came in very close to the Reserve Bank of New Zealand's own in-house expectations, helping to put a floor under a bearish fall.

Key highlights

"The largest contributor to inflation was higher prices for housing and household utilities, up 0.9 percent this quarter, and 3.1 percent in the year to June 2018.

“New Zealanders are paying more to keep their homes running,” prices senior manager Paul Pascoe said. “Rates, property maintenance services, and home insurance are all higher than they were this time last year.” Higher premiums, fire service, and earthquake levies across the year all contributed to an 18 percent increase in dwelling insurance in the June 2018 year.

Petrol prices rose 3.2 percent in the June 2018 quarter, but this was countered by lower prices for used cars and home entertainment. Used car prices fell 3.3 percent, while subscriber TV and audio-visual equipment fell 7.2 percent and 15 percent, respectively.

“It was cheaper to buy a used car this quarter as dealerships looked to move some stock, but that was offset by higher running costs,” Mr Pascoe said. “With implementation of the regional fuel tax on 1 July, Auckland consumers will experience higher prices next quarter.”

The national average price for a litre of 91 octane reached $2.06 in June 2018, with price movements varying across the regions. Wellington and the South Island had significantly higher inflation than Auckland and the rest of the North Island."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.