NEW ZEALAND: Westpac Edges Down Q4 Inflation F/C, RBNZ Pricing Still For Nov Cut
Earlier monthly price data for Oct has seen Westpac revise down its Q4 inflation forecast, see below for more detail. Food prices fell 0.3%m/m, after falling 0.4% in Sep. This bought the y/y pace to 4.7%, up from Sep's 4.1% pace, but we have stabilized under 5% in recent months. Westpac cites softer travel and rental for its forecast revision. Note that on Wednesday this week we get Q3 PPI, although this tends not to shift market thinking too much. Note that Q4 CPI in NZ prints on Jan 23 next year.
Westpac: "We’ve revised our forecast for December quarter inflation to +0.3% and +2.8% for the year to December. Those estimates are both down 0.1ppts from our earlier forecast. Our updated forecast reflects information from Stats NZ’s monthly selected prices update. That update showed greater than expected softness in travel costs, which can be volatile on a month-to-month basis and will warrant close attention over the coming months. However, we also saw softness in other areas. Most notably, rental inflation has been very weak. Our updated forecast is close to the RBNZ’s last published forecast from their August MPS for a 0.3% quarterly rise, and 2.7% annual inflation. "
- Note, RBNZ dated OIS pricing is little changed across meetings, post this morning's data (we also had the services PMI, which rose but remain sub 50). 25bps of easing is priced for November, with a cumulative 34bps by February 2026.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
