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Australia - International Trade & Retail Sales (Feb.)

Retail sales and the trade surplus declined in February but while we still expect consumption to rise in Q1, net trade may have been a drag on growth.
Ben Udy Australia and New Zealand Economist
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Australia & New Zealand Economics Update

RBNZ will hike rates to 4% but cut next year

The RBNZ lifted the overnight cash rate by 50bp to 3% today as everyone had anticipated and signaled that it will deliver another 50bp hike in October. We now expect the Bank to hike rates to a peak of 4% instead of our previous forecast of 3.5%, but we still expect rate cuts next year.

17 August 2022

Australia & New Zealand Data Response

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17 August 2022

Australia & New Zealand Economics Update

Higher migration not enough to cool labour market

An increase in the permanent migration programme will help to alleviate labour shortages. But the rapid tightening of the labour market in recent months has been driven by strong labour demand rather than a shortfall in supply. The upshot is that the RBA would still have to tighten policy further.

16 August 2022

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RBNZ Watch

RBNZ tightening creeping closer

We doubt the RBNZ will adjust any policy settings when it meets next Wednesday 14th July. However, as the New Zealand economy continues to recover faster than the RBNZ expects we think the Bank will adopt an increasingly hawkish tone. We expect the Bank to announce an end to its asset purchases In August and to start hiking rates from May 2022.

7 July 2021

Australia & New Zealand Data Response

Australia: Retail Sales (May 2021)

Retail sales are sure to decline in June as the impact of the recent lockdowns weighs on household consumption. Even so, the rise in retail sales in May means the risks to our forecast the consumption was unchanged in Q2 are to the upside.

5 July 2021

Australia & New Zealand Economics Weekly

Labour shortages to persist

Job vacancies have continued to surge in Australia highlighting worsening staff shortages in almost every industry. While subdued labour mobility was an initial driver, we estimate that labour mobility is almost back at its pre-virus level. Instead, we still believe that the border closure is the biggest driver of these shortages. Given that we don’t expect the border to reopen until the middle of next year, the labour market is set to remain tight for a long time to come.

2 July 2021
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