NEW ZEALAND: Q4 CPI Forecast To Be Close To Band Mid-Point
Q4 CPI data including the RBNZ’s estimates of core are released on Wednesday. Bloomberg consensus forecasts for headline inflation are in line with the RBNZ’s November projections at 2.1% y/y, 0.1pp moderation from Q3. The expected quarterly increase of 0.5% is slightly higher than the RBNZ’s 0.4%. The Q3 sector factor model measure of core was at 3.4%. Following the sharp contraction in Q3 and Q4 growth, another 50bp rate cut on February 19 is likely, especially if inflation prints around the band’s mid-point.
- Quarterly headline inflation estimates range from +0.3% to +0.6% resulting in annual rates of 2% to 2.3% y/y. Westpac is in line with consensus’ 0.5%/2.1%, while Kiwibank and ASB are slightly lower at 0.4%/2.1% and ANZ higher with 0.5%/2.2%. BNZ is the outlier amongst the local banks forecasting the CPI to rise 0.6% q/q and 2.3% y/y due to an above-consensus estimate for tradeables inflation.
- Domestically-driven non-tradeables inflation will be watched closely. It is forecast to rise 0.8% q/q and 4.7% y/y down from 1.3% q/q & 4.9% in Q3. Consensus is in line with the RBNZ. ANZ, BNZ and Westpac are all at consensus, while Kiwibank and ASB are lower forecasting 0.6% q/q and 0.7% respectively.
- In November, the RBNZ forecast Q4 tradeables prices to fall 0.2% q/q and 1.5% y/y, but Bloomberg consensus is higher projecting a 0.1% q/q rise (forecasts range from -0.2% to +0.4% q/q) resulting in a 1.2% y/y drop. Kiwibank and ASB are consistent with consensus, while Westpac is lower forecasting a 0.1% q/q decline, ANZ and BNZ are higher with +0.2% q/q and +0.4% q/q respectively.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU WANTS GOVT TO PREPARE FOR NEW US ADMINISTRATION
- TRUDEAU DOESN'T ADDRESS QUESTIONS ABOUT HIS LEADERSHIP
USDCAD TECHS: A Pullback Would Be Considered Corrective
- RES 4: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 3: 1.4537 2.0% 10-dma envelope
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4356 @ 16:56 GMT Dec 20
- SUP 1: 1.4301 Low Dec 18
- SUP 2: 1.4174/4014 20- and 50-day EMA values
- SUP 3: 1.3928 Low Nov 25 and a key support
- SUP 4: 1.3822 Low Nov 6
USDCAD bulls remain in the driver’s seat. While price faded into the Thursday close, the recent breach of 1.4178, the Nov 26 high, confirmed a resumption of the uptrend and this maintains the price sequence of higher highs and higher lows. The latest rally opens 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4174, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Bearish Trend Structure
- RES 4: 0.6550 High Nov 25
- RES 3: 0.6501 50-day EMA
- RES 2: 0.6429 High Dec 12
- RES 1: 0.6337/6396 Low Dec 11 / 20-day EMA
- PRICE: 0.6263 @ 16:55 GMT Dec 20
- SUP 1: 0.6199 Low Dec 19
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
The trend needle in AUDUSD continues to point south and this week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6396, the 20-day EMA.
