NZ CPI: No trigger for near-term hike - TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TDS point out that New Zealand’s March quarter CPI jumped by +1.0%/qtr, a fraction higher than TD/mkt at +0.8% (although many were at +0.9%), but outsized increases in Food, Fuel and the (annual) excise tax increase drove the result.

Key Quotes

“Due to a soft Q1 2016, annual inflation popped to 2.2%/yr, the first time the RBNZ under Governor Wheeler has ‘achieved’ the mid-point of its 1-3% target band.”

“Three months ago NZD OIS was 120% priced for a yearend hike, and this is now a more realistic 33%. We don’t see the Bank shifting to a hawkish stance until inflation expectations shift higher. The Bank’s near-term CPI profile will be lifted in the May Monetary Policy Statement but is unlikely to change over the medium-term.”

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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