VIEW: ANZ write CPI "was slightly.......>

NEW ZEALAND: VIEW: ANZ write CPI "was slightly below the rise incorporated in

the RBNZ's Feb MPS. But the details of the print were broadly in line with RBNZ

exp., with volatility in tradables driving the miss. Looking forward, a lower

NZD should start to feed more fully into tradables & oil has already rallied 50%

from the Dec low. This will result in a higher tradable inflation forecast in

the May MPS, limiting any perceived risk of lower inflation exp. Most

importantly, non-tradable inflation was bang on the RBNZ's exp. While inflation

is a lagging indicator, the RBNZ will take a degree of comfort from the fact

that non-tradables is at its highest level in 5 years, with weakness

concentrated in the tradable component. Today's data were solid under the hood &

we exp. the fall in the NZD to continue to fade as the detail is digested.

Looking forward, we may see some further uplift in domestic inflation, as past

capacity pressure feed through. The medium-term outlook remains troubling.

Domestic inflationary pressures appear fragile. We exp. the RBNZ to retain its

recently adopted dovish tone in May, with the solid details of today's data

buying the RBNZ time to be sure that OCR cuts are indeed required."