Australia & New Zealand Economics Weekly We still expect the RBA to end QE in February Surging cases of the Omicron variant are putting Australia’s healthcare system under pressure and will weigh on consumption in Q1. But we think fresh lockdowns will be avoided. What’s more, growing... 7th January 2022 · 6 mins read
Australia & New Zealand Economics Weekly RBA to end asset purchases in February While the Omicron variant poses some downside risks, Australia’s labour market has all but recovered from the recent lockdowns and we think that the unemployment rate will fall faster than the Reserve... 17th December 2021 · 4 mins read
Australia & New Zealand Economics Weekly Federal fiscal resilience masks state weakness Treasurer Josh Frydenberg will gloat when he unveils in the upcoming Mid-Year Fiscal and Economic Outlook that the federal deficit will be smaller in 2021/22 than expected despite the recent Delta... 10th December 2021 · 5 mins read
Australia & New Zealand Economics Weekly Omicron could add to inflationary pressure If Omicron were able to evade existing vaccines, a renewed period of lockdowns would be required which would force the RBA to step up its bond purchases. Inflation would fall initially as crude oil... 3rd December 2021 · 5 mins read
Australia & New Zealand Economics Weekly Border reopening won’t ease labour shortages much Australia’s government isn’t keen on opening the immigration floodgates once the border reopens to migrants next year and we still expect the unemployment rate to fall to 4% by 2023. Nor do we expect... 26th November 2021 · 6 mins read
Australia & New Zealand Economics Weekly Wage growth and inflation to continue to strengthen RBA Governor Phillip Lowe doubled down on the view wage growth will remain too low to justify a rate hike anytime soon. But wages for workers on individual agreements is soaring. And we think wage... 19th November 2021 · 6 mins read
Australia & New Zealand Economics Weekly Inflation will keep the RBA under pressure Business purchase costs in the October NAB survey rose to their strongest level since 2008, consistent with trimmed mean inflation of nearly 1.5% q/q. That probably overstates the strength in... 12th November 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBNZ set to hike by 50bp, RBA remains the archdove The exceptional strength of New Zealand’s mean that we now think the RBNZ will hike rates by 50bps in November and by a further 100bps next year, which would take the OCR to 2.0%. That’s above the... 5th November 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBA set to ditch yield target next week The rise in trimmed mean inflation into the RBA’s 2-3% target band for the first time in six years has only added to the aggressive repricing in the outlook for the RBA’s policy rate over the past... 29th October 2021 · 7 mins read
Australia & New Zealand Economics Weekly Market pricing on RBA too aggressive Despite the rise in virus cases in recent weeks, strong inflation in New Zealand increases the pressure on the RBNZ to tighten policy further. While we are sticking to our forecast of a 25bp hike in... 22nd October 2021 · 6 mins read
Australia & New Zealand Economics Weekly Plans to double migration sound good in theory The new NSW premier has received advice that Australia should double the pace of migration in the coming years to make up for lost population growth. That plan would help ease labour shortages, boost... 15th October 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBA’s dovish stance set to be challenged While the RBNZ this week hiked interest rates by 25bp and signalled that more is to come, the RBA remained dovish. That makes sense in light of the continued weakness in underlying inflation and wage... 8th October 2021 · 5 mins read
Australia & New Zealand Economics Weekly Soaring food and energy prices to keep inflation high The spike in rural commodity prices should spill over into higher food inflation before long. And while the impact of higher energy commodity prices is less clear cut, we think electricity inflation... 1st October 2021 · 7 mins read
Australia & New Zealand Economics Weekly 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... 24th September 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBNZ set to tighten in October, RBA in early-2023 The strong rise in New Zealand’s GDP in Q2 nearly returned output to its pre-virus path despite the headwinds from low net migration and the slump in foreign tourism. So while GDP plunged in Q3, we... 17th September 2021 · 4 mins read
Australia & New Zealand Economics Weekly Reopening imminent but won’t start with a bang ‘Freedom day’ in New South Wales could be reached in little over a month. But the new freedoms will only be given to vaccinated residents. And the slower progress on vaccination in other states mean... 10th September 2021 · 6 mins read
