New Zealand CPI misses in the June quarter

New Zealand June quarter CPI has missed expectations.

Prices increased by 0.4% over the quarter, leaving the annual rate at 0.3%. Markets had been expecting quarterly growth of 0.6%, leaving the annual rate at 0.4%.

Here’s Statistics New Zealand on the breakdown of the June quarter report.

“The consumers price index (CPI) rose 0.4 percent in the June 2015 quarter, following falls of 0.3 percent and 0.2 percent in the March 2015 and December 2014 quarters.

The main impact came from higher petrol prices, which were up 8.8 percent in the June quarter. Without petrol, the CPI was flat for the quarter.

The average price of a litre of 91 octane petrol in the June 2015 quarter was $1.95, compared with $1.79 in the March quarter. By the end of the June quarter, petrol pump prices were 4.1 percent above the average price for that quarter.

Prices for the housing and household utilities group rose 0.7 percent for the latest quarter. Prices for newly built houses excluding land were up 1.5 percent nationally (2.8 percent in Auckland, and 0.7 percent in Canterbury). Housing rental prices rose 0.6 percent, with Auckland prices up 0.8 percent and Canterbury up 0.7 percent.

These price rises were partly offset by lower prices for domestic airfares (down 13 percent) following price rises in the previous two quarters. Domestic airfares were down 3.0 percent from a year earlier. Telecommunication services also fell for the June quarter (down 1.9 percent)”.

Over the quarter non-tradable inflation, domestic-orientated price movements, rose by just 0.1%, the lowest level seen since the December quarter of 2009. Offsetting that weakness tradable inflation, reflective of international price movements, jumped 1.0% on the back of higher fuel and vegetable prices. Statistics New Zealand note that without the jump in petrol prices, CPI would have been unchanged for the quarter.

Having been thumped overnight by close to 1.5% on the back of another weak dairy auction and general weakness in commodity currencies, the New Zealand Dollar has continued to slide with the NZD/USD exchange rate dropping to .6573.

As the chart below shows, the Kiwi is now approaching the lowest level seen against the US dollar since mid-2009.

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