New Zealand CPI

The New Zealand Dollar made progress this week after being bearish since mid-September.

Monday October 15th, the New Zealand CPI will be released. With the last Quarterly report showing the slowest annual rate in 13 years, you don’t want to miss Monday’s release.

Economists consider the CPI one of the most significant indicators. The forecast for Monday is a 0.5% increase for the NZ CPI.

CPI (Consumer Price Index) is the average price change of various goods and services in that economy. The CPI is usually released as a percentage increase or decrease.

In July, when New Zealand’s Q2 CPI was released, it brought the the NZ CPI to the slowest annual rate since 1999. The 13-year-low fell short of economic expectations in July and has made it likely that New Zealand will not raise their interest rates any time soon. The couple weeks proceeding July’s CPI release were bullish possibly because of Risk Aversion. If we see a similar release Monday, we could see similar market movement.

More New Zealand Analysis

Economists expect inflation to take off in a modest manner over the coming year.

“Economists expect inflation will begin ticking up modestly later this year and next year, however, as reconstruction efforts pick up steam in earthquake-ravaged Christchurch, with a rate rise still considered likely in the longer term.” According to Reuters, click to read more. Interest Rates are high in relation to the rest of the world (with the exception of Australia). 2.50% has been their consistent release since early 2011. This shows stability on their part, and a high interest rate is a precious commodity in today’s economic world.

Monday’s release will shine some light on which direction New Zealand is going. If we get a worse report than last quarter, I think that will really confirm that New Zealand is headed I the wrong direction.

New Zealand unemployment rates have steadily between 6% and 7% for years showing fair stability in the labor market.

What are your thoughts on the economic situation of New Zealand?

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