Much to the RBNZ's chagrin, inflation in New Zealand continued to have a four handle last quarter. The main culprit was non-tradables inflation, which remained uncomfortably high, at 5.8%. With the economy in doldrums and the labour market slackening, we still expect domestically-driven price pressures to abate over the coming months. Even so, we're pushing back our forecast for the Bank's first rate cut from August to November. Elsewhere, we learnt that the Australian labour market remained inordinately tight in Q1, supporting our view that the RBA won't be rushing to loosen policy either.
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