PREVIOUS TRADING DAY EVENTS 19 July 2023

New Zealands quarterly inflation figure suggests inflation is higher than expected during Q2. Does this mean that more RBNZ hikes are on the way?  

On a quarteronquarter basis, CPI grew 1.1, slightly above the expectations of a 0.90 increase. Expectations shift towards the idea that the Reserve Bank of New Zealand RBNZ would hike interest rates further despite signalling a pause earlier this month.

The New Zealand dollar appreciated moderately against the U.S. Dollar after the release but soon reversed during the Asian session.

Inflation might have retreated from the 7.2 high seen last year but still remains well above the RBNZs 1 to 3 target range.

Source httpswww.reuters.commarketsnewzealandq2cpirises11slightlyfasterthanexpected20230719

The release of the U.K.s low Inflation figures yesterday early at 900 have shaken the market as they finally suggest that hikes have the desired effect on inflation. The release caused the pound to weaken against other currencies since it was recorded at 7.9 but still well above the Bank of Englands 2 target.

Inflation dipped more than expected, but the gulf between the UK and the Eurozone inflation levels remains. Despite most categories seeing a decline, food nonalcoholic beverage inflation at 17.3 remains only 1.8 below its peak in March 2023. But in a respite to consumers, while overall energy costs remain high, petrol and diesel prices have dropped over twenty per cent in the…