NZ: Dec quarter CPI was a fraction higher than expected - TDS

Analysts at TDS note that the New Zealand’s Dec quarter CPI was a fraction higher than expected, but via two events that don’t determine policy, fuel and airfares.

Key Quotes

“Annual inflation popped to 1.3%/yr, the first time within the RBNZ 1-3% target band since mid-2014, but doesn’t justify the relatively aggressive OIS strip (120% by year end). We do not expect a hawkish RBNZ at the 9 Feb OCR Review, and expect an unchanged CPI profile in the Monetary Policy Statement. Next week’s labour market update is widely expected to be strong, hence a surprise now will be weakness.”