Australia & New Zealand Economics Weekly Inflation trouble The slowdown in underlying inflation in the third quarter didn’t come as a shock to the RBA. But the bigger picture is that market forces are still keeping inflation subdued. And with early signs that... 2nd November 2018 · 1 min read
Australia & New Zealand Economics Weekly Housing matters Falling equity and house prices have both made the news this week. But when it comes to what is going to influence the Australian economy, housing matters much more. The weakening housing market is... 26th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Full employment has not been achieved Even though the unemployment rate has fallen to the Reserve Bank of Australia’s 5.0% estimate of the natural rate, the RBA will still want to see signs of much faster wage growth before it hikes... 19th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Falling equities, rising petrol, climbing borrowing costs The recent plunge in equity prices, surge in petrol prices and rise in borrowing costs all triggered by developments overseas won’t hurt the Australian economy much. But they do add to other headwinds... 12th October 2018 · 1 min read
Australia & New Zealand Economics Weekly RBA’s upbeat tone contrasts with downbeat data We doubt that the gap between the Reserve Bank of Australia’s relatively upbeat tone and the downbeat feel of the recent economic news will be sustained for long. We suspect the RBA may become a... 5th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Budget deficit, Royal Commission and election risk The shrinking budget deficit gives the Coalition government a bit more fiscal ammunition to deploy ahead of Australia’s next Federal election, while there is no way of knowing at this stage how the... 28th September 2018 · 1 min read
Australia & New Zealand Economics Weekly Our new forecasts and the RBA’s trade war fears After revamping all our forecasts, we have concluded that the RBA and the RBNZ probably won’t raise interest rates until late in 2020 and late in 2021 respectively. That explains why we now expect the... 21st September 2018 · 1 min read
Australia & New Zealand Economics Weekly Conditions for higher wages (slowly) falling into place This week the Australian economy took one more step towards meeting the conditions that would require higher interest rates, but it may be another 12-18 months at the least before the RBA has enough... 14th September 2018 · 1 min read
Australia & New Zealand Economics Weekly Surging GDP, stationary RBA The recent stellar performance of the Australian economy hasn’t made it much more likely that the RBA will raise interest rates sooner because it is businesses that are benefiting most not households... 7th September 2018 · 1 min read
Australia & New Zealand Economics Weekly Rising mortgage rates, housing and the RBA Australia is still a very long way from a recession or a financial crisis, but this week’s news that Westpac is hiking its mortgage rates has raised the risk a bit. After all, higher mortgage rates... 31st August 2018 · 1 min read
Australia & New Zealand Economics Weekly Is the dollar pondering a Labor government? This week’s political chaos has increased the downside risks to the Australian dollar. Although the markets welcomed the news that Scott Morrison has replaced Malcolm Turnbull as Australia’s Prime... 24th August 2018 · 1 min read
Australia & New Zealand Economics Weekly The dollar, wages and the inflation target The weakening in the Australian dollar to a 19-month low will provide a small boost to CPI inflation, but it won’t solve Australia’s persistent problem of low wage growth. While lowering the RBA’s... 17th August 2018 · 1 min read
Australia & New Zealand Economics Weekly Divining in different directions The chances that interest rates in Australia will rise a bit earlier than we expect have grown this week while it has become more likely that interest rates in New Zealand will be unchanged for longer... 10th August 2018 · 1 min read
Australia & New Zealand Economics Weekly Lending, house prices and retail sales With the housing market slowdown in danger of morphing into the deepest and longest in Australia’s modern history, we doubt that the recent resilience of household spending will last. The risk is that... 3rd August 2018 · 1 min read
Australia & New Zealand Economics Weekly Stronger growth failing to boost inflation The fall in underlying inflation in the second quarter in Australia revealed this week has made us more confident in our non-consensus call that underlying inflation will stay below the RBA’s 2-3%... 27th July 2018 · 1 min read
Australia & New Zealand Economics Weekly The strong labour market and the cautious RBA The financial markets are probably right to assume that the release of June’s bumper labour market figures has increased the chances that the Reserve Bank of Australia will raise interest rates a bit... 20th July 2018 · 1 min read
