Migration curbs won’t adversely dent labour supply

The ongoing boom in net overseas migration to Australia is helping to take the heat out of the labour market. With public attitudes towards mass migration souring, the government announced this week that it will tighten visa rules for temporary visitors. However, the new curbs will mostly apply to foreign students, who do less to ease labour shortages than other immigrants. Meanwhile, New Zealand's economy contracted yet again in Q3. And with partial CPI data pointing to a continued decline in price pressures, we think the RBNZ will ease policy a lot sooner than it has signaled.