Markets Outlook

The BNZ Markets Outlook highlights an impending spike in Q2 CPI driven by a Middle East-related energy shock, alongside evidence of a weakening NZ service sector. Markets are watching the upcoming RBNZ survey of expectations and the Australian federal budget for further policy direction.

Key Takeaways

• 1.The Middle East conflict has triggered a substantial energy cost shock, with diesel and petrol prices expected to surge by 42% and 16% respectively in April.
• 2.New Zealand growth is slowing sharply, with the Performance of Services Index (PSI) falling to a weak 46.0 in March, indicating the sector is under strain.
• 3.The RBNZ is focused on medium-term inflation expectations; while headline CPI is spiking, wage outcomes remain non-threatening for now.

Table of Contents

• Monitoring the cost
• Global Watch
• Key Event Previews
• Fixed Interest Market
• Foreign Exchange Market
• Technicals
• Quarterly Forecasts
• Annual Forecasts
• Key Upcoming Events

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