Australia & New Zealand Economics Update Australia - Omicron will add to upward pressure on inflation The Omicron variant will probably result in a stagnation in consumption this quarter. However, by worsening supply shortages it will only add to the upward pressure on inflation. The upshot is that it... 6th January 2022 · 3 mins read
Australia & New Zealand Economics Update Australia - Government yet to deliver pre-election spending boost The government unveiled only modest increases in spending in today’s fiscal update. And while the unemployment rate has now reached levels where the Treasurer has pledged to start repairing the public... 16th December 2021 · 3 mins read
Australia & New Zealand Economics Update Australia moving closer to digital Aussie dollar The Reserve Bank of Australia and the Australian government are keen to explore the benefits of a retail central bank digital currency. But with pilot projects yet to start, we doubt that an eAud will... 9th December 2021 · 4 mins read
Australia & New Zealand Economics Update RBA to hike rates by less than markets anticipate The RBA still sounded dovish when it kept policy unchanged policy. We think that rates will rise earlier than the Bank anticipates but later and by less than what the financial markets price in. 7th December 2021 · 3 mins read
Australia & New Zealand Economics Update RBNZ will hike rates to 2.0% next year While the RBNZ only hiked rates by 25bps at today’s meeting, it is set to continue lifting rates next year. However, we think a slowdown in the economy will end the Bank’s hiking cycle with the OCR at... 24th November 2021 · 3 mins read
Australia & New Zealand Economics Update Australia - Rate hikes will result in housing downturn High household debt will magnify the impact of interest rate hikes on the housing market and we now expect prices across the eight capital cities to fall by 5% from H2 2023. The upshot is that the RBA... 24th November 2021 · 3 mins read
Australia & New Zealand Economics Update RBA recapitalisation would lift public debt Rising interest rates will result in the RBA making further losses in the years ahead. The Bank’s existing reserves should be enough to absorb those losses in a benign scenario, but the Bank will stop... 9th November 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- The impact of rate hikes on household finances If the RBA hiked rates by nearly 200bp as the financial markets were anticipating until recently, households’ debt servicing burden would hit an all-time high and housing would become the least... 3rd November 2021 · 3 mins read
Australia & New Zealand Economics Update Patient RBA set to hike rates only gradually The RBA abandoned its yield target and its pledge that rates will remain low until 2024 today, but still sounded dovish. While the financial markets expect the first rate hike in May next year, we... 2nd November 2021 · 3 mins read
Australia & New Zealand Economics Update Structural slowdown in China a key threat to Australia Australia’s exports to China are even more vulnerable to a slowdown in the property sector than they were before the trade spat as iron ore has gained in importance. We think that China’s steel demand... 13th October 2021 · 3 mins read
Australia & New Zealand Economics Update RBNZ to continue hiking rates as restrictions ease The RBNZ’s decision to begin its hiking cycle while Auckland is still in lockdown highlights that the New Zealand economy is on the brink of overheating. And as restrictions ease, we think the Bank... 6th October 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- Sustained high inflation will prompt rate hikes in 2023 The RBA today stuck to its guns by predicting that rates won't rise until 2024, but our view that inflation will remain higher for longer means it will happen in early-2023 already. 5th October 2021 · 3 mins read
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... 23rd September 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- Shipping costs to boost inflation next year Soaring shipping costs will exacerbate the impact of the weaker exchange rate on import price inflation. Indeed, we expect underlying inflation to return into the RBA’s 2-3% target next year. 20th September 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- What to expect from a monetary policy review We doubt that any independent review of Australia’s monetary policy framework would result in a change to the RBA’s 2-3% inflation target. But the Bank could be forced to put more emphasis on house... 15th September 2021 · 4 mins read
Australia & New Zealand Economics Update RBNZ to press ahead with tightening Economic activity in New Zealand took a significant hit as the country was plunged into its strictest level of lockdown in August. But New Zealand’s success at taming the virus means output should... 9th September 2021 · 5 mins read
