NZ CPI: No trigger for May cut - TDS

Sandeep Kanihama FXStreet Contributor

Annette Beacher, chief Asia-Pacific macro strategist at TD Securities, note that the New Zealand’s March quarter CPI rose by +0.1%/q, a downside miss compared with RBNZ (+0.2%), consensus (+0.2%/+0.3%) and TD (+0.5%).

Key Quotes

“The 1.5% annual rate was a hair below the RBNZ February 1.6% forecast, despite higher-than-expected fuel and food prices in the interim.”

“The Bank's sectoral factor core measures were published several hours later - a phenomenon that needs to be addressed ASAP. Our five-core-measure average eased a little from 1.9% to 1.8%/y.”

“The miss was only by one decimal point for the RBNZ, domestic inflation surged to a five-year high of 2.8%/y, and tradable inflation is highly volatile.”

“Today's report(s) do not provide a trigger for easing as soon as next month. In a recent Reuters interview, the Governor hinted that a downside surprise was already baked into its March easing bias, where "... what you’re looking at is a long period of being surprised to the downside of CPI inflation so we’ve ... re-centered and thought about that". The RBNZ (and the new external MPC committee members) also need to see a more recent labour market update, released 1 May.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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