No inflation in NZ means no hikes from the RBNZ this year. Tomorrow (i.e. Wednesday in NZ) sees the release of Q4-2014 CPI. We expect a print of -0.2% qoq / 0.8% yoy. Looking further ahead we see annual inflation declining to just 0.1% yoy in Q1-2015 given the global slump in oil prices. As far as the RBNZ is concerned we expect the low inflation prints to keep the kiwi central bank on hold this year. (Our forecasts have two 25bp hikes around the middle of next year – i.e. 2016.)
Read the full report: FX Daily