Australia & New Zealand

Australia Wage Price Index (Q2)

The subdued 0.4% q/q rise in the wage price index in Q2 underlines that the tight labour market didn’t generate large cost pressures even before the latest virus restrictions.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

Australia’s consumer exuberance won’t last

The strong rebound in consumer spending in November is consistent with our view that GDP surpassed its pre-lockdown peak in Q4 already. And while the Omicron tsunami seems to have resulted in a renewed slowdown in consumption, mounting staff shortages and disruptions to goods supply will result in continued strong increases in consumer prices. The upshot is that we still expect the RBA to end its bond purchases in three weeks, though the sluggishness in wage growth means we don’t expect the first rate hike until early next year.

14 January 2022

Australia & New Zealand Economics Focus

Housing downturn will lead to RBNZ rate cuts in 2023

While the strength in New Zealand’s economy will cause the RBNZ to hike rates further this year, we think the RBNZ will end its hiking cycle earlier than the financial markets anticipate. What’s more, we think a housing downturn in 2022 will weigh on the economy at the same time as inflation is easing and the labour market is loosening. On that basis we expect the RBNZ to cut rates in 2023. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

12 January 2022

Australia & New Zealand Data Response

Australia - Retail Sales/External Trade (Nov. 2021)

November’s data support our view that GDP will surpass its pre-delta level in Q4. But while the strength in retail sales is set to fade in the months ahead as Omicron weighs on consumption, the likely drag from net trade to GDP growth in Q4 is also likely to reverse in Q1.

11 January 2022

More from Marcel Thieliant

Japan Data Response

Japan External Trade (Jul. 2021)

Japan’s export volumes stagnated in July but given that a large share of those exports are cars and capital goods, we think they will rise again over the coming months.

18 August 2021

Australia & New Zealand Economics Update

RBA may be too pessimistic about price pressures

The Reserve Bank of Australia signalled today that it’s unlikely to reverse the tapering of its bond purchases even as Sydney’s virus outbreak is getting worse. We still expect the tight labour market to deliver stronger wage growth and inflation than the Bank is anticipating, prompting the Bank to tighten earlier than its current guidance of 2024.

6 August 2021

Japan Economics Weekly

Calls for more draconian restrictions growing

The number of new virus cases hit record highs this week as the Delta variant is now spreading widely. While the vast majority of the elderly are now fully vaccinated and deaths have remained low, the number of hospitalisations has surged. With the government acknowledging that the medical system risks being overwhelmed, calls for a nationwide state of emergency or a “hard” lockdown have grown louder, which poses downside risks to our forecast that the economy will merely tread water this quarter.

6 August 2021
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