Q1 CPI inflation at +0.3% q/q and +1.5% y/y came in lower than market and RBNZ expectations of +0.5% and +1.7%. This is meaningful to the extent that the starting point of inflation is lower than the central bank had factored into its projections back in March. Everything else equal, it raises the possibility that the OCR will not need to be lifted as much as has been previously projected, or at least, interrupt the tightening process at some stage.
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BNZ