Australia & New Zealand
...

Dovish RBA to expand QE by another $100bn in June

The Reserve Bank of Australia stuck to its dovish stance despite the strength in recent data so we reiterate our view that it will expand its bond purchase program by another $100bn in June.
Ben Udy Australia and New Zealand Economist
Continue reading

More from Australia & New Zealand

Australia & New Zealand Economics Weekly

Lockdowns and bond yields ease

The end of the lockdown in Victoria is an upside risk to our forecast that consumption will be unchanged in Australia in Q2. Meanwhile, S&P upgraded Australia’s credit rating outlook but that has little implication for Australian bond yields. We expect yields to rise to 2% by the end of the year as the RBA starts to taper its weekly bond purchases in November.

11 June 2021

Australia & New Zealand Economics Weekly

Lockdowns and bond yields ease

The end of the lockdown in Victoria is an upside risk to our forecast that consumption will be unchanged in Australia in Q2. Meanwhile, S&P upgraded Australia’s credit rating outlook but that has little implication for Australian bond yields. We expect yields to rise to 2% by the end of the year as the RBA starts to taper its weekly bond purchases in November.

11 June 2021

Australia & New Zealand Economics Update

RBA may make QE more flexible

We now expect the RBA to refrain from announcing a target for the overall amount of bond purchases at the July meeting while keeping the weekly pace of purchases unchanged at $5bn. A more flexible approach to bond-buying would make it easier for the Bank to end QE by mid-2022 as we anticipate.

8 June 2021

More from Ben Udy

Australia & New Zealand Data Response

Australia CoreLogic House Prices (May)

House prices are surging but forward indicators point to growth slowing in the months ahead. Indeed, we suspect prices may decline a little in 2021.

1 June 2021

Australia & New Zealand Chart Book

Fiscal policy to remain loose for longer

Australian Treasurer Josh Frydenberg noted in October that the Government would not pursue budget repair until the unemployment rated was comfortably below 6%. However, the unemployment rate fell much more rapidly ahead of the May Budget than almost anyone had anticipated, reaching around 5.5%. The Treasurer responded by noting that the conditions for reducing the budget shortfall aren’t in place yet and unveiled additional stimulus measures in the Budget. And while the recent sharp decline in spending means that the New Zealand government is on track to shrink the structural deficit in 2020/21, the government unveiled considerable fresh spending in its latest Budget, too. The upshot is that the structural budget balance in both countries will remain deeply in negative territory for years to come.

31 May 2021

Australia & New Zealand Economics Weekly

Australia’s recovery set back, RBNZ signals rate hikes

The outbreak of the Indian virus variant in Victoria this week highlights the risks from the slow vaccine roll-out. Despite strong investment figures for Q1, we are sticking to our forecast that the economy will expand 4.5% this year. Meanwhile, the Reserve Bank of New Zealand has come around to our view that interest rates should be lifted next year. And its forecasts now imply an even faster pace of tightening than we had anticipated. Even so, given the Bank’s poor experience with past tightening cycles, we still expect the Bank to err on the side of caution.

28 May 2021
↑ Back to top