Sticky New Zealand Inflation Supports More RBNZ Hikes – BBH

Brown Brothers Harriman (BBH) analyst Elias Haddad expects New Zealand's Q2 Consumer Price Index (CPI) to remain well above the central bank's target. Both quarterly and annual inflation readings are projected to be only slightly below the RBNZ's own forecasts.

This persistent inflationary pressure supports the case for additional rate hikes by the Reserve Bank of New Zealand. The NZD could benefit from a more hawkish policy stance relative to other central banks.

Investors will watch the Q2 CPI release for confirmation of sticky inflation and clues on the RBNZ's next moves.