RBNZ Q2 Sectoral Factor Model Inflation rises by 5.4% YoY, Kiwi unfazed around 0.5650
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The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the third quarter of 2022 this Tuesday.
The gauge rose to 5.4% YoY in Q3 2022 vs. 5.2% seen in Q2 (revised up from 4.6%).
In early Asia, New Zealand’s Consumer Price Index (CPI) accelerated by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%.
The Kiwi dollar is unperturbed by the RBNZ inflation gauge, as NZD/USD is reversing the latest rally to 0.5677, triggered by the above forecast Q3 CPI release.
At the time of writing, the kiwi is trading at 0.5648, up 0.24% on the day.
The Reserve Bank of New Zealand has a set of models that produce core inflation estimates. The sectoral factor model estimates a measure of core inflation based on co-movements – the extent to which individual price series move together. It takes a sectoral approach, estimating core inflation based on two sets of prices: prices of tradable items, which are either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports.
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