NZ CPI overview
We have the New Zealand Q3 inflation report due at 2145 GMT today. Analysts at ANZ explained that they are expecting to see a solid 0.8% q/q print, boosted by one-off factors:
"With the RBNZ expected to look through transitory factors, it will be important to discern the signal from the noise in the release. Although CPI could be strong, the RBNZ are still wary about risks to the medium-term activity outlook and that should temper any market reaction. The RBNZ’s sectoral factor model estimates of core inflation will also be out at 3pm, with a tick up expected."
How could it affect the NZD/USD?
NZD/USD has been consolidating the recent rise from S1 located at 0.6496 to R2 at 0.6547, but the data could be a tempory catalyst for a move to either side of the rising wedge's parameter located at R1, 0.6529 and R3, 0.6562. However, with strength in inflation likely to be transitory, rallies in NZD maybe picked off by the bears as fading opportunities within the broader bearish daily trend's channel. Support is located at 0.6460 and resistance is seen at 0.6590.
Key notes
Market wrap: financial markets were generally stable overnight - ANZ
About the NZ CPI
Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services . The purchase power of NZD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.
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