Disappointing growth, benign inflation and a stubbornly high dollar are expected to keep the Reserve Bank resolutely on hold when it reviews the official cash rate on Thursday.
When it last reviewed rates in March it not only left the OCR at its all-time low of 2.5 per cent but pencilled in a very gently rising track ahead, with only one hike a year for the next three years.
If that was intended as a cautionary signal to the foreign exchange market, it has not worked.
The high New Zealand dollar, Governor Alan Bollard said, was detrimental to the tradeable sector, undermining economic growth and inhibiting the rebalancing of the economy towards exporter-led rather than consumer-led growth.
"Sustained strength in the NewZealand dollar would reduce the need for future increases in the OCR," he said.
But since then the currency has only gone sideways, despite further falls in export commodity prices.
ANZ's commodity price index fell another 1.7 per cent in March. In New Zealand dollar terms the index is the lowest it has been since January 2010 - and this is before last week's Fonterra auction in which dairy prices dropped with a thud.
Meanwhile, gross domestic product in the December quarter grew at only half the pace the bank (and most other forecasters) had expected.
Inflation in the March quarter was also weaker than the bank had forecast, and the underlying measures of inflation remain clustered around the mid-point of its target band.
In a Reuters poll of market economists, an overwhelming majority - 14 out of 16 - believe it will be December at the earliest before the Reserve Bank starts to raise the OCR.
The money market is even more dovish; according to Credit Suisse's swaps-base indicator it sees a less than 50:50 chance the bank will have raised rates by this time next year.
But mortgage rates at 47-year lows are contributing to a revival in the housing market.
"Housing market activity is the only area which may present an upside risk to inflation," said ASB chief economist Nick Tuffley.
"Housing shortages are already translating to a pick-up in house price inflation and rents, mostly in Auckland and Canterbury where shortages are most acute."
Historically, housing-related inflation tended to be highly correlated with rising non-tradeables inflation pressures more generally, Tuffley said.
"The Reserve Bank will be watching recent developments with some discomfort. Should these trends continue, or if the bank sees, say, evidence of some bandwagon behaviour starting to drive the housing market, it is likely to become more vocal on the topic."
Westpac chief economist Dominick Stephens said it looked as though growth in the March quarter would come in weaker than the Reserve Bank had expected, just as it did in December.
"To be sure, some forward-looking data has been impressive. The housing market is going from strength to strength, confidence surveys suggest the economy has accelerated in recent months, and the Canterbury rebuild is clearly swinging into gear," Stephens said.
"But these positive data merely affirm the Reserve Bank's forecast of rapidly accelerating GDP. They don't represent a surprise to the central bank."
Offsetting them, he said, were the ongoing decline in export prices, which the bank did not anticipate, and a more downbeat tenor to the international news flow, with weaker data from the United States and China, and fresh concerns about financial stability in Europe.
Tuffley and Stephens both warn that the eventual tightening will be greater than the Reserve Bank's projections, and financial market pricing, imply.
They believe the bank is underestimating the inflationary pressures to come from the rebuilding of Christchurch.
Tuffley says that in the short term, though, the Reserve Bank's worries about the New Zealand dollar are likely to dominate.By Brian Fallow Email Brian