When is NZ CPI and how might it affect NZD/USD?


Wednesday’s Asian session begins with the quarterly release of New Zealand CPI at 21:45 GMT. Considering the central bank's bearish bias, today’s Q3 2019 consumer price index (CPI) continues to be the key catalyst for the NZD/USD pair. Market consensus favors a decline to 1.4% from 1.7% in the YoY number versus no change in QoQ figure of 0.6%.

Analysts at the Australia and New Zealand Bank (ANZ) follow the suit with firm bets on further rate cuts from the Reserve Bank of New Zealand (RBNZ):

“We expect annual headline CPI inflation for NZ (out at 10:45am) to slow 0.2%pts from Q2 to 1.5% in Q3, with non-tradable inflation lifting 0.2%pts to 3.0% on account of previous capacity pressures. But more importantly for the RBNZ, forward-indicators suggest broader growth momentum is continuing to wane, and that suggests inflation will soften in time. A positive surprise in today’s CPI release isn’t going to change that. We expect the RBNZ to cut the OCR 25bps in November, February and May.”

How could the data affect NZD/USD?

In addition to recently easing tensions at the US-China trade front, renewed risk-on and the dovish verdict from the RBNZ inflate possibilities that downbeat data will have a little negative impact on the Kiwi pair. As a result, positive support for the quote, on the back of upbeat data, can well be expected. The soft inflation pressure, meanwhile, could keep further OCR cuts by the RBNZ on table and can extend the NZD/USD weakness.

On a technical side, a 50-day Exponential Moving Average (EMA) level of 0.6371 limits the quote’s rise towards 0.6400 round-figure whereas a sustained break below the recent low surrounding 0.6260 can recall 0.6200 on the chart.

Key Notes:

NZD/USD steadies near 0.6270 ahead of GDT auction

About NZ CPI:

Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services . The purchase power of NZD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.

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