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RBA set to extend QE in July

The Reserve Bank of Australia upgraded its forecasts for GDP growth and inflation but reiterated that it is prepared to extend its asset purchases. We stick to our forecast of another $100bn extension in the Bank’s bond purchase program, though this would happen in July rather than in June.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Update

Australia - Housing downturn could force earlier rate cuts

House prices are starting to fall across Australia earlier than we had anticipated. While we still expect the RBA to hike rates until early-2023, the experience from previous housing downturns points to an earlier end to the current tightening cycle. What’s more, a severe housing downturn could prompt the Bank to cut rates earlier than our current forecast of mid-2024 if inflation drops back again in earnest.

24 May 2022

Australia & New Zealand Economics Update

What does a Labor government mean for Australia?

A Labor government will probably keep fiscal policy looser than the previous Coalition government, putting more pressure on the RBA to hike interest rates. But while a Labor government will make greater efforts to decarbonise the economy, the bulk of mining output is exported so this won’t have a big impact on the mining industry. And we doubt Labor will be able to end the trade war with China.

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Australia & New Zealand Economics Update

New Zealand - Budget boost will exacerbate inflationary pressures

While the government’s Budget was focused on equipping households to withstand surging living costs, by adding to demand we think it will cause inflation to be higher over the next year. That’s all the more reason for the RBNZ to continue hiking rates aggressively throughout this year.

20 May 2022

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Japan Economic Outlook

Faster vaccine campaign allows rapid rebound

Japan’s lagging vaccine rollout has finally reached cruising speed, which should allow a rapid recovery in activity over the second half of the year. The labour market may soon be as tight as it was before the pandemic, but we expect this year’s jump in inflation to be short-lived. As such, the Bank of Japan will keep policy loose for the foreseeable future.

7 July 2021

Australia & New Zealand Economics Update

RBA to hike rates in early-2023

By tapering its bond purchases and watering down its commitment to keep its policy rate unchanged until 2024, the RBA is paving the way for interest rate hikes in 2023.

6 July 2021

Japan Economics Weekly

Manufacturing bottlenecks may be easing

The economic recovery stalled last quarter as the services sector was held back by virus restrictions and manufacturers suffered from chip shortages. However, with daily jabs now above the government's 1mn target and chip supply ramping up, activity is set for a strong rebound in the second half of the year.

2 July 2021
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