Breaking: NZ CPI 7.2% YoY, higher than expected, NZD rockets to 0.5659

Statistics New Zealand has released the third quarter Consumer Price Index inflation data as follows:

New Zealand CPI (Q/Q) Q3 2.2% (est 1.5%; prev 1.7%) - CPI (Y/Y) Q3 7.2% (est 6.5%; prev 7.3%)

NZD/USD has bolted to the upside for fresh highs on the day.

More to come...

There was a lot of room for the headline CPI number to surprise on the upside or the downside which was reflected in the range of expectations for this morning’s data, from a low of 6.3% YoY to a high of 7.0% YoY (with the median estimate being 6.5%).

About NZ Consumer Price Index

With the Reserve Bank of New Zealand's (RBNZ) inflation target being around the midpoint of 2%, Statistics New Zealand’s quarterly Consumer Price Index (CPI) publication is of high significance. The trend in consumer prices tends to influence RBNZ’s interest rates decision, which in turn, heavily impacts the NZD valuation. Acceleration in inflation could lead to faster tightening of the rates by the RBNZ and vice-versa. Actual figures beating forecasts render NZD bullish.