NZD: Inflation lifting, but still too low – HSBC

Research Team at HSBC, notes that the New Zealand Q1 CPI was in line with expectations, at 0.4% y-o-y (as expected by HSBC, the market and the RBNZ).

Key Quotes

“Most measures of underlying inflation picked up a little in annual terms, suggesting inflation may have bottomed out. But domestic inflation pressures remain very weak beyond housing. With inflation still well below the bottom of the 1-3% target band (let alone the 'near 2%' medium-term target mid-point), we expect the RBNZ to cut its cash rate by a further 25bps in Q2. On balance, we see this as most likely to come in June, after the next reading of inflation expectations, but next week’s meeting is certainly ‘live’.”