Bank views on NZ CPI: ANZ: We expect....>

NEW ZEALAND: Bank views on NZ CPI: ANZ: We expect headline inflation rose 0.4%

q/q, 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. However, there are a number of

temporary factors at play including policy changes and base effects. Outside of

housing, the inflation pulse is expected to remain soft. A broader lift in

inflation is likely to remain absent until we see a meaningful lift in wages.

Tradable prices are expected be broadly flat on a quarterly basis. 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.