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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.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

RBA to slow pace of tightening from October

The latest survey data suggest that inflation will continue to accelerate over coming months and we expect the Reserve Bank of Australia to deliver another 50bp rate hike next month. But with food spot prices returning to the level before the Ukraine war and wholesale gas and electricity prices coming off the boil, the Bank will probably slow the pace of tightening to smaller 25bp hikes from October.

12 August 2022

RBNZ Watch

RBNZ tightening cycle will stop by year-end

Rising interest rates are weighing on the housing market but economic activity is holding up and inflation has continued to accelerate. The upshot is that the Reserve Bank of New Zealand will hike interest rates by another 50bp at the upcoming meeting on 17th August, but we expect smaller 25bp across Q4.

10 August 2022

Australia & New Zealand Economics Weekly

RBA will press on with another 50bp hike next month

The Reserve Bank of Australia has indicated that it will slow the pace of tightening over coming months as tighter policy is starting to weigh on activity. With growth softening rather than collapsing, we’re sticking to our forecast of another 50bp hike next month, but we now expect the Bank to revert to smaller 25bp hikes during the fourth quarter.  

5 August 2022

More from Marcel Thieliant

Japan Economics Update

Participation rate set to fall further

The pandemic has brought a halt to the last decade’s rise in Japan’s participation rate which had allowed the labour force to expand despite challenging demographics. Any post-pandemic recovery is likely to be short-lived: we expect the participation rate to drop back over coming decades and the labour force to be 17% smaller by 2050.

6 December 2021

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 prices would continue to weaken, but disruptions to transportation networks coupled with continued strength in goods demand would add to the upward pressure on goods prices. However, for now the activity data suggest that the economy is roaring to life after the recent lockdowns and we’re sticking to our above-consensus GDP forecast of 5% for next year.

3 December 2021

Australia & New Zealand Data Response

Australia International Trade (Oct. 2021)

While it’s early days, the October trade figures suggest that net trade will turn into a drag on GDP growth yet again as imports rebound after the end of lockdowns.

2 December 2021
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