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Australia Consumer Prices (Q1 2022)

Inflation surged in Q1 and is on track to surpass 6% later this year, exceeding the levels reached around the GST hike in 2000. With trimmed mean inflation already higher than at the start of previous tightening cycles, the Reserve Bank of Australia may opt for a 50bp hike at its June meeting.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

Housing downturn to weigh on activity

The housing downturn is now in full swing. While that hasn’t prevented a solid rise in consumption in Q2, we think falling wealth will be a drag on consumer spending next year. What’s more, our forecast that house prices will eventually fall 15% from their April peak would be consistent with dwelling investment falling sharply in the coming years. The upshot is that the housing downturn will bring the Australian economy close to recession next year.

1 July 2022

Australia & New Zealand Data Response

Australia CoreLogic House Prices (Jun.)

The monthly decline in house prices in June was the largest since 2019 but is unlikely to be the sharpest decline in the current downturn. We think house prices will eventually fall by 15% from their April peak, which will weigh heavily on GDP growth next year.

1 July 2022

Australia & New Zealand Data Response

Australia Retail Sales (May 2022)

The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead.

29 June 2022

More from Marcel Thieliant

Japan Economics Update

BoJ to widen 10-year yield tolerance band further

With US Treasury yields set to keep rising over the coming year, it will become even more difficult for the Bank of Japan to defend its target for 10-year JGB yields. While we don’t expect the Bank to abandon Yield Curve Control altogether, we think it will widen its tolerance band further, perhaps to ±50bp.

26 April 2022

Japan Economics Weekly

Fresh yen & bond market turmoil, poor growth outlook

The Bank of Japan had to step in yet again to defend its 10-year yield target this week, but it didn’t have to go to the same lengths as in late-March to keep yields in check. With yields nailed to the floor, the yen continued to slide rapidly against the dollar, but we doubt that the Finance Ministry’s jawboning will be followed up by actual intervention. Meanwhile, Japan’s population fell at the fastest pace on record last year. Unfortunately, a shrinking population is now being compounded by falling productivity. The upshot is that the long-term prospects for Japan’s economy are increasingly grim.

22 April 2022

Japan Economics Update

Four questions on FX intervention

With the yen falling to a 20-year low against the dollar, talk of foreign exchange market intervention is growing. While we think the bar for any intervention is high, this Update answers some key questions. In view of the wider interest, we are also making this Japan Economics Update available to clients of our FX Markets Service.

21 April 2022
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