Australia & New Zealand Chart Pack

Full impact of higher interest rates hasn’t been felt yet

According to RBA estimates, household interest payments jumped from 5.1% of disposable income in Q1 to 6.9% last quarter and we expect them to reach 12.5% by end-2023. With household debt around...

21st December 2022 · 12 mins read

Australia & New Zealand Chart Pack

Monetary policy will be loosened next year

With inflation surprising to the upside in Q3, the Reserve Bank of Australia was forced to revise up its near-term forecasts for inflation in its latest Statement on Monetary Policy. What’s more, the...

7th November 2022 · 12 mins read

Australia & New Zealand Chart Pack

Housing downturn will weigh on activity before long

The 1.7% q/q rise in New Zealand’s production GDP and the 0.9% q/q rise in Australia’s GDP in Q2 were among the strongest increases among major advanced economies. (See Chart 1.) However, GDP growth...

22nd September 2022 · 11 mins read

Australia & New Zealand Chart Pack

Housing downturn will weigh on activity before long

Australia’s house prices are now falling at a similar rate as they did during the 2017-19 downturn, which was the largest in the country’s modern history. Home sales remain well above pre-pandemic...

22nd August 2022 · 12 mins read

Australia & New Zealand Chart Pack

RBA to hike rates more sharply than most anticipate

The minutes of the RBA’s July meeting showed that the Bank debated a smaller 25bp rate hike but ended up hiking rates by 50bp. Those minutes also included a discussion of the level of the neutral...

21st July 2022 · 11 mins read

Australia & New Zealand Chart Pack

Steeper interest rate hikes and larger house price falls

Hawkish shifts by the RBA and the RBNZ in recent weeks have prompted us to forecast an even more aggressive hiking cycle by both central banks in the months ahead. Both central banks hiked rates by...

9th June 2022 · 11 mins read

Australia & New Zealand Chart Pack

Consumption to surge even as real incomes fall

We now expect Australia’s inflation to rise by more than 6% this year. Even allowing for an acceleration in earnings growth and a further solid rise in employment as immigration resumes, that will...

17th May 2022 · 11 mins read

Australia & New Zealand Chart Pack

Central Bankers’ confidence dilemma

Inflation is surging in both Australia and New Zealand. That is putting pressure on central banks to hike interest rates to slow the economy and curb inflation. But both the RBNZ and the RBA...

21st April 2022 · 11 mins read

Australia & New Zealand Chart Pack

Broadening price pressures to prompt rate hikes

RBA Governor Lowe noted in a recent speech that the Bank no longer has specific criteria for deciding whether inflation is sustainably in the target range. But he highlighted that along with the...

7th March 2022 · 11 mins read

Australia & New Zealand Chart Pack

Inflationary surge prompting monetary tightening

New Zealand’s inflation surged to a 30-year high of 5.9% in Q4. And while Australia’s 3.5% was much lower, it is well above the RBA’s 2-3% target band. Trimmed mean inflation is about one percentage...

28th January 2022 · 11 mins read

Australia & New Zealand Chart Pack

Omicron won’t hold back consumption for long

The Omicron has lifted new virus cases to a record high, though hospitalisations remain low. We estimate that there are around 2000 hospital beds available for Covid-19 patients in New South Wales...

23rd December 2021 · 11 mins read

Australia & New Zealand Chart Pack

Diverging outlook for monetary policy

While the RBNZ has lifted interest rates by 50bp and signalled that as much as 200bp of tightening is still to come, the RBA’s central scenario remains that interest rates won’t be raised until 2024...

29th November 2021 · 11 mins read

Australia & New Zealand Chart Pack

Surging inflation puts pressure on monetary policy

Trimmed mean inflation rose to 2.1% in Australia in Q3, the first time it has entered the RBA’s 2-3% target band since 2015. Even more strikingly, trimmed mean inflation in New Zealand rose to 4.4%...

29th October 2021 · 11 mins read

Australia & New Zealand Chart Pack

Early signs of second-round effects from soaring prices

The RBA expects headline inflation to drop back from 3.8% in Q2 to 1.5% by mid-2022. By contrast, we now only expect it to fall to 2.5% over this period, reflecting the pass-through from soaring coal...

30th September 2021 · 11 mins read

Australia & New Zealand Chart Pack

Delta not clipping the wings of RBNZ hawks yet

New Zealand has entered a draconian lockdown and new infections continue to rise. The lockdown prompted the RBNZ to refrain from hiking interest rates at its August meeting and financial markets were...

26th August 2021 · 11 mins read