New Zealand just dropped its Q2 2024 inflation data!
The report showed consumer prices rising by 0.4%, lower than the expected 0.6% uptick. In fact, it’s the lowest reading since Q2 2020!
The annual CPI reading also pointed to lower price pressures, as it slowed down from 4.0% to 3.3%, the slowest since Q2 2021.
- Headline CPI: +0.4% q/q (0.6% expected, 0.6% previous)
- Annual Headline CPI: +3.3% y/y (3.6% expected, 4.0% previous)
Annual non-tradables inflation, a closely watched indicator for the Reserve Bank of New Zealand (RBNZ), also inched lower from 5.8% to 5.4% for the period.
Link to New Zealand’s Q2 2024 CPI report
Details showed that increases in housing and household utilities – driven by higher rent and property rates – led the price increases. Higher prices for insurance and cigarettes and tobacco also made upward contributions to the CPI.
On the other hand, lower prices for food, transport, vehicle purchases, and housing contents and services helped drag overall consumer prices lower.
Market Reactions
New Zealand Dollar vs. Major Currencies: 5-min
Overlay of NZD vs. Major Currencies 5-min Forex Chart by TradingView
The New Zealand dollar, which had been moving within ranges (except against the USD) since the London session, surged when the report came out.
One reason for the jump could be traders cashing in after several days of steady declines. Some analysts also point to persistently high non-tradable inflation, which lowered the chances of the Reserve Bank of New Zealand cutting rates next month.
The NZD saw some pullbacks within the first hour of the release but then continued to climb until the Asian session opened and things stabilized.