Australia & New Zealand
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Australia & New Zealand

RBA Watch

RBA Watch

RBA’s dovish view increasingly under pressure

The acceleration in underlying inflation increases the pressure on the RBA to adjust its forward guidance. But with wage growth still sluggish, we think it will stick to its pledge that rate hikes are unlikely before 2024 at next week’s meeting. We expect price pressures to remain stronger than the Bank and expect the first rate hike in early-2023.

27 October 2021

RBA Watch

RBA set to hike in 2023

With the latest lockdowns set to end next month, we expect the RBA to taper its bond purchases in February. We still expect wage growth to accelerate more rapidly than the Bank anticipates and stick to our forecast for the first rate hike in early-2023.

28 September 2021

RBA Watch

RBA to stay the course

The health situation in Australia continues to deteriorate, but the acceleration in the vaccine rollout means that lockdowns probably won’t last much longer. The Bank doesn’t believe that stepping up its asset purchases will provide much help and we expect it to stick to its plan of tapering its asset purchases to $4bn at the upcoming meeting.

1 September 2021
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RBA Watch

RBA to delay tapering to November

We expect the Reserve Bank of Australia to respond to the worsening virus outbreak in Sydney by delaying the tapering of its asset purchases from September to November. Even so, we still expect those purchases to end in mid-2022, with rate hikes to follow in early-2023.

RBA Watch

Flexible QE paves way for tapering in November

The Reserve Bank of Australia will probably shift to a flexible form of QE at the upcoming meeting while keeping the weekly pace of purchases unchanged. However, we still expect the Bank to start tapering its asset purchases towards the end of this year and we now expect the first rate hike in early-2023.

RBA Watch

RBA to extend QE in July

The Reserve Bank of Australia will still sound dovish at the upcoming meeting on 1st June, paving the way for an extension of its bond purchase programme at the July meeting. But amidst early signs of inflationary pressures, we think the Bank will start to hike rates in 2023.

RBA Watch

RBA still likely to extend bond purchases further

The Reserve Bank of Australia will revise down its near-term forecasts for the unemployment rate at its meeting on 4th May, but it will probably still signal that inflation will fall short of its 2-3% target for the foreseeable future. As such, we still expect the Bank to announce a third round of asset purchases by mid-year and reiterate our view that markets have gone to far in pricing in rate hikes.

RBA Watch

Recent data not enough for the RBA to shift course

In recent weeks, the Reserve Bank of Australia has continued to push back against expectations of monetary tightening. We think the RBA will keep policy settings unchanged at the meeting on 6th April. And later this year we expect the Bank to announce a further extension to its asset purchase programme. What’s more, we think the market is overzealous in pricing in rate hikes as early as next year. We think rates will be on hold at least for a couple more years and probably until 2024.

31 March 2021
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