New Zealand Q2 CPI lower-than-expected, RBNZ to cut rates?

New Zealand Q2 CPI came at 0.4 % q/q vs 0.5% exp and 0.2% last, with the y/y stood at 0.4% as well vs 0.5% exp and 0.4% last. The data increases the chances for the RBNZ to cut rates on its next monetary policy meeting. As such, the NZD is under severe pressure post data.

Key facts - NZ Stats

Quarterly change

In the June 2016 quarter compared with the March 2016 quarter:

• The consumers price index (CPI) rose 0.4 percent – to a level of 1205.
• Petrol prices rose 5.3 percent, making the largest upwards contribution. 
• Housing-related prices rose, with purchase of new housing excluding land up 2.1 percent.
• Prices for tradable goods and services rose 0.6 percent, while prices for non-tradable goods and services rose 0.3 percent.
• After seasonal adjustment, the CPI rose 0.2 percent.

Annual change

From the June 2015 quarter to the June 2016 quarter:

• The CPI inflation rate remained at 0.4 percent.
• Prices increased for newly built houses, excluding land (up 5.6 percent), and rentals for housing (up 2.3 percent).
• Lower prices for transport made the main downward contribution.
• Prices for non-tradable goods and services increased 1.8 percent.
• Prices for tradable goods and services decreased 1.5 percent.

Key average prices

• The average price of 1 litre of 91 octane petrol was $1.78 in the June 2016 quarter, up from $1.69 in the March 2016 quarter.

The CPI measures the rate of price change of goods and services purchased by New Zealand households. Statistics NZ visits 2,800 shops around New Zealand to collect prices for the CPI and check product sizes and features.