NZ reaches inflation target

Global inflation battle being won

New Zealand's inflation rate came in a bit lower than expected at 0.6 per cent, falling to 2.2 per cent over the year (down from 3.3 per cent last quarter).

That's the first time that NZ inflation has been withing the target range for 3 years, and the RBNZ is now free to cut interest rates hard to stave off a recession, starting to another 50 basis points cut next month.

Figures from Stats NZ suggest that more Kiwis are moving to Australia now for better employment opportunities. 

It won't just be New Zealand which sees big rata cuts over the next 6 to 12 months.

Canada's inflation rate also fell by more than expected to just 1.6 per cent, upping the chances of a 50 basis points interest rate cut next week.

The Eurozone inflation rate fell from 2.2 percent to 1.8 per cent, which was under the inflation target and clears the path for more easing. 

The UK inflation figure isn't released yet, but is expected to come in below the 2 per cent target for the firs time in 3 years.

Australia's inflation figures will be released on October 30, and should follow in a similar trajectory.

One slightly disappointing piece of news for Australia is that housing construction cost inflation picked up again last quarter, according to CoreLogic.

Construction costs have soared by over 30 per cent over the past half-decade, and more for units, in turn constraining supply.

As discussed further by Michael Matusik here.

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