NZ: CPI prints 0.5% for Q1 – TDS

Analysts at TDS note that New Zealand’s Q1 CPI was +0.5%/qtr and in annual terms came in as per RBNZ expectations at +1.1%, the bottom end of the 1%-3% target range and in line with the market, factoring in base effects (after food prices rose sharply in Q1 last year) and the market factored in the fee free first year of education.

Key Quotes

“Even excluding education, annual CPI fell from 1.5% to 1.3% and core inflation dropped from 1.1% to 0.9%, the first time core inflation fell below 1%/yr in 2 years. So it does appear as underlying CPI is softening in NZ. Later in the day, the RBNZ published it's Q1 sectoral factor model update, showing it has remained at 1.5%/yr for two straight quarter now. There is little in today;s data to sway the RBNZ to bring foward a hike to this year.”