Tiny New Zealand’s consumer price index (CPI ) for the last Quarter of 2015 and y/y basis due in Early Pacific session on Wednesday. On an annual basis, inflation is expected to be dip to 0.3% on Q4 expected to dip to -0.2%.

Annual CPI inflation remains low at 0.4 percent, but is expected to move into the 1 to 3 percent target range in the first quarter of 2016,RBNZ. The NZ’s inflation remains far below RBNZ inflation target.

The lower inflation could renew calls for another cut in interest rates, pressure appears to be slowly mounting for a further cut.the OCR is at the lowest level since it was introduced in the 1990s at 2.5%

Since 2000, New Zealand CPI (‚Consumers Price Index’) inflation has averaged around 2.7 percent. This compares with averages of 2.4 percent in the 1990s, and averages of over 11 percent for the previous two decades. Since September 2002, the inflation target has been to keep inflation within a range of 1–3 percent on average over the medium term, reported by RBNZ.

Globally, economic growth is below average and inflation is low, despite highly stimulatory monetary conditions. House price inflation in Auckland remains high, posing a financial stability risk.

RBNZ’s December monetary policy statement revealed, “The inflation rate is expected to move inside the target range from early 2016, as earlier petrol price declines will drop out of the annual calculation, and the lower New Zealand dollar will be reflected in higher tradables prices”.

Also read: Monetary Policy Statement December 2015

Westpac forecasts inflation at 0.2 per cent for 2015, a fresh low in the current cycle, reported by Stuff.

“We probably need another shoe to drop in the form of a housing market slowdown before they [the Reserve Bank] will really be willing to cut further,” Westpac senior economist Michael Gordon said.

ASB also expects the OCR to be cut to 2 per cent, when the Reserve Bank comes to terms with the fact that a weaker kiwi dollar will not deliver the expected boost to inflation that it is counting on, with retailers struggling to pass on cost increases to customers.

“Over the week ahead, we expect the downward pressure on the New Zealand dollar to continue,” ASB economist Kim Mundy said in a note. “We expect poor market sentiment to persist over the week ahead.”

The Kiwi dollar remains weak concerns mounts to slower Chinese economy, lower inflation and weak daily prices. On Wednesday’s early Pacific session, the Kiwi dollar is trading at 0.6495 levels against the greenback.

Global Dairy Trade prices fell for the second time in this year. The second Global Dairy Trade auction of 2016 has recorded a drop of 1.4% on the last auction held on January 5, 2016, reported by Agriland.