NZ inflation looks set to remain low over 2015 - ANZ

FXStreet (Bali) - Mark Smith, Senior Economist at ANZ, shares his take on the latest NZ CPI Q1 print, noting that inflation looks set to remain low over 2015, but uncertainty over the outlook beyond that is high.

Key Quotes

"Today’s inflation report provided something for everyone, with headline and non-tradable inflation coming in above the Reserve Bank’s March MPS expectation, but details on core inflation remained benign beyond a few cost-push pockets – signals that were well flagged by our Monthly Inflation Gauge."

"Inflation looks set to remain low over 2015, but uncertainty over the outlook beyond that is high, with mixed signals and avid debate regarding whether we are in a period of structurally low inflation or simply experiencing an unusual confluence of “shocks”."

"At the margin we believe today’s core figures add more weight to the structural thesis (the core numbers are hard to ignore despite non-tradable inflation being stronger), albeit marginally; it certainly cements our Monthly Inflation Gauge as a key timely inflation indicator."

"We continue to expect the OCR to remain unchanged for a very extended period."