NZ CPI for the January to March quarter is due at 2245GMT. What to expect?

Earlier posts:

A couple more now, these via....

TD:

  • Aside from the seasonal excise bump in Tobacco/Alcohol and ongoing housing pressures, price rises look to be modest across the board after some heavy discounting in the prior quarter. The wildcard is Education as it is usually +2-3%/q with higher fees from 1 Jan. Our estimate is the sector falls by -10%/q. The RBNZ should look through such one-off policy adjustments.

ANZ have a detailed preview, I picked up part of the comments on 'core':

We expect headline inflation rose 0.4% q/q in the 2018 March quarter

  • This would see annual inflation dip to 1.0%, slightly below the RBNZ's February MPS forecast of 0.6% q/q and 1.1% y/y.

Core inflation measures should be broadly steady

  • In Q4, the suite of core measures we monitor showed a mild softening, if anything. For Q1, the expected decline in annual headline inflation is partly due to base effects which shouldn't impact core measures to the same extent.
  • We expect inflation to pick up again over coming quarters. Core inflation measures such as the weighted median and trimmed mean should smooth through this noise. We retain a view that domestic inflation will rise and broaden in time. That is largely predicated on our view that the cyclical low in wage inflation is behind us and that courtesy of both skill shortages and government policy changes, wage inflation will continue to lift. However, this is far from certain. Given we see GDP growth in the next year or so running around trend, there is little to suggest that inflation is about to break out any time soon.
  • With this in mind, 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.