Bank desk views on today's NZ CPI.......>

NEW ZEALAND: Bank desk views on today's NZ CPI release:

- ANZ: We exp. headline CPI rose 0.1% q/q in Q2. Stepping back, however, we're

starting to question how long housing-related inflation will last. We exp. the

RBNZ will stay cautious, given the inflation pulse remains subdued, the growth

outlook has softened, and downside risks have increased.

- ASB: We exp. the CPI to show a rebound to 1.6% yoy (+0.5% qoq) in Q2. The

near-term inflation outlook has firmed markedly as a result of higher oil

prices, the recent fall in the NZD & incoming petrol taxes. We now exp. headline

inflation to hit 2% by the end of '18. However, core inflation pressures remain

relatively subdued & downside risks to the outlook have increased over recent

months. As a result, we exp. the RBNZ to remain cautious.

- Westpac: We exp. a 0.6% q/q rise, 1.7% y/y. Fuel prices have played a major

role in the gyrations of inflation in recent years, and their influence is

likely to linger for a while longer. The lower New Zealand dollar over the last

year has had little impact on the prices of imported goods to date. We expect

import prices to rise gradually over the rest of this year.