ANZ monthly inflation Gauge for New Zealand rises in September

The ANZ Monthly Inflation Gauge for New Zealand rose 0.3 percent sequentially in September, while it rose 2.9 percent year-on-year. A sequential rise of 0.9 percent was seen in the purchase of housing alongside a 2 percent rise in accommodation services together adding nearly 0.2 percentage points.

Rents rose higher by 0.2 percent sequentially, while domestic airfares rose 2.3 percent, being the top contributors. Only one of the 36 categories recorded a monthly fall, giving a trivial drag, with 24 unchanged and 11 rising.

The solid print of 1.4 percent quarter-on-quarter reflects some noise, including a general recovery from the second quarter’s subdued print from the Gauge and the addition of the highly weighted ‘Overseas accommodation prepaid in New Zealand’ sub-component to accommodation services. Looking through this, there was a stable but unspectacular quarterly rise, underpinned by a seasonal rise for domestic airfares, continued strength in the purchase of housing, and some one-offs including higher postal services.

“Overall the Gauge is pointing to a solid print for non-tradable CPI inflation in Q3”, stated ANZ.

Annual inflation in the Gauge has staged a small rebound in recent months, running at 2.9 percent in September from 2.4 percent in June, but is still lower than 3.1 percent seen in early 2018.

“Looking through policy-induced movements and influence of the housing group, the ex-housing Gauge posted a 4-year high, at 1.3 percent y/y. However, this is also being affected by noise in Q3”, added ANZ.

At 12:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was bearish at -85.5739, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 121.157. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex