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APRA to impose lending restrictions by mid-2022

While house prices have surged, household debt remains contained and lending standards remain sound overall. However, housing credit growth is set to accelerate and there are already signs that some households are borrowing too much. The upshot is that we now expect regulators to impose restrictions on debt-to-income ratios by the middle of next year.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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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

RBA Watch

RBA to keep hiking by 50bp for now

The Reserve Bank of Australia will probably lift the cash rate by another 50bp in July and August before reverting to smaller 25bp hikes. However, the risks are tilted towards a prolonged period of aggressive tightening and rates may well peak above our current forecast of 3%.

28 June 2022

Australia & New Zealand Economics Weekly

More 50bp hikes coming

We agree with RBA governor Phillip Lowe that market pricing for the Cash rate looks too aggressive. But we also think the consensus is still too dovish. After all, Governor Lowe is starting to grow concerned that wage growth will be too strong to allow the Bank to meet its target. And the RBA is still lagging behind a number of its peers in its hiking cycle. We therefore expect the RBA to hike rates to a peak of 3.1%, higher than the analyst consensus of a peak of 2.60%.

24 June 2022

More from Marcel Thieliant

Japan Data Response

Japan Flash PMIs (Sep. 2021)

September’s flash PMIs suggest that while the services sector is bouncing back as the delta wave has ebbed, the manufacturing sector is suffering from weaker demand and mounting supply shortages.

24 September 2021

Australia & New Zealand Economics Update

Rising household debt will limit scope for rate hikes

High and rising household debt in Australia and New Zealand will limit central banks’ scope to hike interest rates. The upshot is that we expect the RBNZ to hike rates by a modest 125bp in the tightening cycle set to start next month, while the RBA’s policy rate may only surpass 1% in 2024.    

23 September 2021

Japan Economics Update

New Bank of Japan Governor unlikely to lift rates

The Bank of Japan left policy settings unchanged today and while a new Prime Minister could appoint a more hawkish BoJ Governor, we expect the Bank to keep interest rates unchanged for years.

22 September 2021
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