NZ CPI: more noise than signal? - ANZ

Analysts at ANZ expect headline CPI rose 0.4% q/q in Q1, which would see annual inflation slow from 1.6% to 1.0% y/y – a touch below the RBNZ’s expectation of 1.1%.

Key Quotes:

"The fall in annual headline inflation is more noise than signal. Nonetheless, evidence of a broadening in domestic price increases beyond housing remains elusive. Core inflation measures are expected to be broadly stable."

"We suspect the RBNZ will continue to bide its time until there’s a little more certainty that inflation is set to rise."

"But with a new Governor there is naturally more uncertainty than usual, and Mr Orr’s first Monetary Policy Statement on 11 May will be perused with great interest, despite a clear market expectation of an unchanged OCR for a long time yet."