Australia & New Zealand Economics Weekly RBA will cut rates and step up QE in October Recent data from Victoria show that the second lockdown has not curbed activity as much as we had anticipated. We are therefore revising up our Q3 GDP forecast. Even so, the economic outlook remains... 25th September 2020 · 4 mins read
Global Economics Update Australia - Lessons from second virus waves The experience from second virus waves in Australia, New Zealand and Japan is that consumer spending falls even if governments don’t impose major restrictions. However, there are three key reasons why... 25th September 2020 · 4 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ setting the stage for negative rates The Reserve Bank of New Zealand (RBNZ) continued to set the stage for negative rates today and we think the OCR will be cut into negative territory early next year. 23rd September 2020 · 3 mins read
Australia & New Zealand Economics Focus House prices may rise by 7% in 2021 The improvement in the labour market, lower borrowing costs and a turnaround in leading indicators all suggest that the housing downturn will soon come to an end. We now expect house prices across the... 22nd September 2020 · 16 mins read
Commodities Update Rally in soybean prices may be overdone Strong demand from China will put a floor under corn and soybean consumption in 2020/21. But with record expected yields in the US, we expect corn and soybean prices to come off the boil. 18th September 2020 · 3 mins read
Australia & New Zealand Economics Weekly Labour market looking up The unemployment rate fell in Australia in August despite the lockdown in Victoria. The phasing out of JobKeeper is threatening some jobs, particularly those people in Victoria still not working their... 18th September 2020 · 6 mins read
Australia & New Zealand Data Response Australia - Labour Market (Aug.) August’s labour market data were much stronger than most had anticipated and we think that employment will continue to rise. 17th September 2020 · 2 mins read
Global Economics Update Australia - Lessons from Australia’s average inflation targeting Inflation has been close to the midpoint of the RBA’s 2-3% inflation target since its launch in the 1990s, but this has come at the expense of soaring house prices and household debt. Australia’s... 15th September 2020 · 4 mins read
Australia & New Zealand Economics Update Australia - Stealth QE doesn’t let RBA off the hook Proposals by the banking regulator and the RBA that banks will need to hold more government bonds could be interpreted as financial repression. However, the surge in the outstanding stock of... 8th September 2020 · 3 mins read
Australia & New Zealand Economics Weekly Withdrawal of policy support a headwind to activity With a record plunge in output, Australia entered its first recession in 29 years last quarter. Huge public support payments resulted in an increase in both corporate profits and household income and... 4th September 2020 · 4 mins read
Australia & New Zealand Data Response Australia - Retail Sales (Jul.) Retail sales were 12% above pre-virus levels in July but the closure of non-essential shops in Victoria will weigh heavily on spending in August. That means that sales won’t rise all that much in Q3... 4th September 2020 · 2 mins read
Australia & New Zealand Data Response Australia - International Trade (Jul.) The fall in export values in July is consistent with our view that exports won’t rebound much in Q3, but the jump in import values suggests that domestic demand is now on the mend. 3rd September 2020 · 2 mins read
Australia & New Zealand Data Response Australia - GDP (Q2) Australia’s GDP fell by more than most had anticipated in Q2 but we think it will rebound marginally in Q3 despite the tightening of restrictions in Victoria. 2nd September 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - RBA may still attempt to lower long-term yields The RBA today expanded its Term Funding Facility which should contribute to continued strong growth in the money supply. And while it didn’t indicate that additional stimulus is forthcoming, we still... 1st September 2020 · 3 mins read
Australia & New Zealand Data Response Australia - CoreLogic House Prices (Aug.) The housing downturn deepened further in Melbourne in August and continued in Sydney but seems to be abating elsewhere. We reiterate our forecast that house prices across the eight capital cities will... 1st September 2020 · 2 mins read
Australia & New Zealand Economics Update Resilience in Australia’s corporate profits unlikely to last The surge in corporate profits in Q2 happened despite a large drop in sales and mostly reflects the impact of the JobKeeper wage subsidy. With that subsidy being scaled back, corporate profits should... 31st August 2020 · 2 mins read
