New Zealand: CPI stronger than anyone expected – ANZ

Headline CPI increased 0.8% q/q in Q1, stronger than anyone expected, per ANZ Bank. NZD/USD trades at 0.6037.

Key quotes

“CPI lifted 0.8% q/q in Q1, stronger than our (0.5% y/y) and market (0.4%) expectations.

“Annual inflation accelerated 0.6%pts to 2.5%. This will probably be the strongest read for quite some time.”

“We foresee annual headline inflation decelerating to the bottom of the RBNZ’s 1-3% target band by the end of the year and remaining below this level throughout 2021, with only a gradual recovery thereafter. Risks to this outlook are skewed to the downside.”