Benign 2Q New Zealand Inflation To Keep RBNZ Sidelined

Pierre Vaugeois
Juillet 18, 2017

Malaysia will release unemployment data for May; in April, the jobless rate was 3.4 percent and the participation rate was 67.7 percent.

The Reserve Bank is mandated with keeping annual inflation between 1 and 3 percent, with a focus on the mid-point.

A drop in fuel costs and airfares offset higher food prices, rents, and power.

While the RBNZ says inflation is "well-anchored" at around 2% in the long-term, it expects it to drop as low as 1.1% in the first three months of 2018. Transport prices were down 1.3%. "That probably won't happen until 2019", he said.

The flat outcome, well below the 1% increase reported in the March quarter, saw the year-on-year increase fall to 1.7%.

South African bonds were flat on Monday morning, with investors focusing on local data events this week and the Reserve Bank's interest-rate announcement for direction. Vegetables prices rose 19 percent for the year, with higher prices for lettuce, kumara, and broccoli. Seasonally lower domestic airfares (down 14.5 percent), lower petrol prices (down 1.9 percent), and seasonally lower prices for auto rentals contributed to the overall price fall.

Australia also will see June results for new motor vehicle sales; in May, sales were up 2.9 percent on month and 4.9 percent on year. Prices for new housing rose 1.8 percent in the June quarter for an annual increase of 6.4 percent. Housing rentals rose slightly (up 0.4 percent), held down by a 1.6 percent fall for Canterbury. Chief among them is promoting a stable inflation rate somewhere in the middle of 1-3%.

The tradables consumers' price index, which includes goods and services that compete with global rivals, fell 0.2 percent in the quarter but rose 0.9 percent on the year. Prices for the purchase of newly built houses, excluding land, made the most significant upwards contribution to the annual result.

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