**As seen in Risk In The Week report 04/14/24, subscribe at cablefxm.co.uk/reports
New Zealand 4Q consumer prices slipped to 0.5% Q/q from 1.8%, the print came in line with economists' expectations. Year-over-year headline CPI rose by 4.7%, the easing left prices rising at the slowest pace since 3Q 2021. Non- tradables components rose 1.1% Q/q and reversed the 3Q uptick, the tradables metric saw the first deflationary print in more than three years. The RBNZ's 2-year ahead survey of inflation expectations has eased to 2.5% in Q1, this is the slowest since 2021 but remains above the policy mandate. On a Y/y basis, economists expect N.Z. headline CPI to rise 4.0%, with the forecast range going from 3.7% to 4.2%. Deutsche Bank has penciled in a 3.9%, while BNZ's projection stands at the top of the range.
Strategists at NAB noted the consensus reading standing above the RBNZ's February MPS, the central bank expects 1Q CPI at 0.4% Q/q and 3.8% Y/y, however, they added that the board stuck with its prior guidance on the OCR during the April monetary policy meeting. Despite the upside risks, NAB doesn't see the broad inflation progress being derailed in 1Q and expects further moderation in the core price measures. However, the desk at ASB warned that price pressures remain elevated and this will raise the threshold for the RBNZ to start monetary policy easing. ASB currently forecasts November for the central bank to deliver its first rate cut.
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