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RBNZ Inflation Expectations Survey

Written by Sam Coxhead on May 24th, 2011.      0 comments

4:00PM (NZT) The markets have continued to focus on the European debt situations in the last 24hrs. The pressure on the EURO has remained in place for the most part, and appetite for risk has been low for the most part.
 
The Greek Govt have announced moves to sell State assets to reduce the GDP percentage of their current deficit. They have stated they are going to sell two ports and scale back holdings in banks for a start. This has seen the EURO pop back from its lows and general market risk aversion wane a little.
 
The standout performer of the growth assets has been the New Zealand dollar, it has continued the form that was jump started in Friday’s offshore session by a large US bank buy order against a number of currencies. It has put on good ground against the EURO, GBP, CAD , JPY and the all important AUD. Some speculation has been that there has been evidence of re-insurance flows once again also, but I cannot confirm that.
 
How long this demand for NZD stays for remains to be seen, but the move looks overdone from a technical analysis point of view, but be weary of standing in the way of a large flow such as this.
 
The RBNZ just released their quarterly Inflation Expectations,  and this rose to 3.0% from 2.6% from last quarter. To my mind this is to be expected as the oil price remained elevated through the quarter and the prospect of the rebuilding to start in Christchurch will certainly lead to higher levels of price growth as demand for goods and services are competed for.
 
The NZD has popped higher again since its release, as can been seen by the table below. The increase has been anywhere from .15 to .35%
 
 
          Past 24 hours
  Current level Pre- INFL EXP  % Chge since INF EXP   Low High
NZD/USD 0.7942 0.7915 0.34%   0.7756 0.7866
AUD/USD 1.0537 1.0517 0.19%   1.0513 1.0642
NZD/AUD 0.7537 0.7525 0.16%   0.7463 0.7533
AUD/NZD 1.3268 1.3289 -0.16%   1.3275 1.3400
NZD/GBP 0.493 0.4916 0.28%   0.4869 0.492
NZD/EUR 0.565 0.5637 0.23%   0.5602 0.5642
NZD/JPY 65.00 64.80 0.31%   64.07 64.93
NZD/CAD 0.7757 0.7732 0.32%   0.7705 0.7742
 
 
 

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