Australia & New Zealand
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International Trade & Retail Sales (Apr.)

The trade surplus widened again in April but that was largely driven by higher commodity prices. Export volumes will need to recover further in the months ahead to prevent trade from being a drag on GDP growth yet again in Q2.
Ben Udy Australia and New Zealand Economist
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RBA Watch

Surge in inflation will prompt first rate hike in August

The rapid tightening of the labour market coupled with the acceleration in underlying inflation will prompt the Reserve Bank of Australia to end its asset purchases at its meeting on Tuesday 1st February. And we now expect the Bank to hike rates to 1.25% by end-2023, with the first hike coming in August. Drop-In (08:00 GMT, 26th Jan): Will the RBA follow the Fed this year? Economists from our Australia and Markets services will talk through the likely path of RBA policy making in 2022 and the implications for Australian bond and currency markets. Register here.

25 January 2022

Australia & New Zealand Data Response

Australia Consumer Prices (Q4 2021)

The strong rise in underlying inflation at the end of last year means the RBA is all but certain to end its asset purchase scheme at its meeting next week. And with underlying inflation now above the mid-point of the RBA’s target, the Bank will come under increasing pressure to hike rates this year.  

25 January 2022

Australia & New Zealand Economics Weekly

RBA to hike rates this year

The fall in the Australian unemployment rate to 4.2% in December means the labour market is now the tightest it has been since 2008. That all but confirms our forecast that the RBA will end its asset purchase programme at its February meeting. And we now think wage growth will rise to 3% by the end of the year. With inflation set to accelerate faster than the RBA has been anticipating, we have brought forward our forecast for the first rate hike from February 2023 to November this year.  

21 January 2022

More from Ben Udy

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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