Fundamental Analysis

Fundamental Report 20/04/2017

• July 14, 2017

NEW ZEALAND CONSUMER PRICE INDEX (CPI)

According to a recent statement from the Reserve Bank of New Zealand, expectations of inflation over the next two years have spiked dramatically. Over the next year, expectations for inflation have risen from 1.29% to 1.56% indicating growing optimism for future economic conditions. According to a recent statement by the bank, CPI is likely to fluctuate throughout the year, reflecting volatility in food and import prices. However, prices are expected to reach target in the medium to long term. Consumer confidence fell slightly during the quarter as households prepare for the upcoming election and the associated uncertainty. On top of this, the unemployment rate rose by a larger margin than estimated for the last quarter of 2016. Despite the disappointment, the labour market participation rate remained high indicating more workers are entering the labour force, however, wage growth remains subdued.  Event: Q1 New Zealand Consumer Price Index, 20^th April 2017, 06:45 GMT+8

• New Zealand CPI is set to rise by 0.8% for the first quarter of 2017, compared with 0.4% growth in the last quarter of 2016. 
• The Westpac Consumer Confidence index dropped to 111.9 in the first quarter of 2017, after climbing 5.1 points in the previous quarter.
• Credit card spending has been on the decline since December, rising by 7.1% in January and 5.3% in February.

Retail sales for the December quarter disappointed, rising 0.8% against a forecast of 1.1% growth.