New Zealand producer prices for the first quarter

Q1 PPI Output -0.9% q/q

  • prior was -0.1%

Input q/q for Q1 -1.1% q/q

  • prior was -0.4%

For the y/y data:

  • Output prices down 2.5% y/y, the biggest drop since Q4 2009
  • Input prices are down 4% y/y, the most since Q3 of 2009

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To the extent that the PPI gives an indication of the path of consumer-level inflation the implications are clear ... inflation is not an issue for the NZ economy.

NZD is a little lower on the data . If the Reserve Bank of New Zealand are of a mind to lower rates, it doesn't seem consumer inflation is an issue. I still reckon the RBNZ is on hold. The OIS market is close to line-ball, pricing the probability of a 25 basis point cut at 48%. The next RBNZ policy meeting is June 11.

more to come