Australia & New Zealand Economics Update Australia - Budget deficit may narrow faster than most anticipate The fact that the government revised up its estimate for the underlying cash balance in 2020/21 by more than 1% of GDP since the October Budget underlines that the economy is recovering much faster... 17th December 2020 · 3 mins read
Australia & New Zealand Economics Update Our key calls for 2021 We think that the recovery from the pandemic will be stronger than most anticipate. That means that the labour market will tighten rapidly, allowing central banks to end their bond purchases. The... 16th December 2020 · 4 mins read
Australia & New Zealand Economics Update Australian banks unlikely to falter The capital ratios of Australian banks may decline a bit as loan deferrals come to an end and other policy support is withdrawn. But with capital ratios having almost doubled since the GFC and... 10th December 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - QE may not be extended in April The RBA still sounded cautious when it left policy settings unchanged today. But if our more optimistic forecasts for GDP growth and inflation are realised, the Bank may not decide to expand QE in... 1st December 2020 · 3 mins read
Australia & New Zealand Economics Update New Zealand - Sharp recovery means negative rates now unlikely New Zealand is likely to be one of the few countries where output had recovered to pre-virus levels in Q3. Taken together with the recent positive news on the vaccine, we no longer expect the RBNZ to... 30th November 2020 · 4 mins read
Australia & New Zealand Economics Update Vaccine to reduce need for further monetary stimulus Australia and New Zealand will benefit less than other advanced economies from a vaccine due to their success in containing the virus. Even so, we’ve lifted our 2021 GDP growth forecasts a bit and no... 26th November 2020 · 3 mins read
Australia & New Zealand Economics Update RBNZ still likely to implement negative rates The Reserve Bank of New Zealand’s (RBNZ) decision to implement a funding for lending programme in December should provide some further stimulus on its own and is another step towards implementing... 11th November 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Consumption to drive above-consensus recovery While card transaction data have overstated the health of consumer spending in recent years, we suspect they didn’t do so recently. As such, we’re willing to take the jump in transaction amounts in Q3... 9th November 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - QE will probably be extended beyond April The RBA didn’t disappoint when it cut interest rates and launched quantitative easing today. And even though it turned more optimistic about the economic outlook, we suspect it will expand its... 3rd November 2020 · 3 mins read
Australia & New Zealand Economics Update How much QE will the RBA deliver? The RBA’s assets will rise further over the coming months as banks draw down funding under the TFF. But so will the assets of other central banks. If the Bank wanted to catch up with the advanced... 21st October 2020 · 3 mins read
Australia & New Zealand Economics Update Fiscal policy set to remain loose We estimate that the income tax cuts and other stimulus measures unveiled in today’s Budget will provide fiscal support of around 2.5% of GDP in 2021/22. That won’t prevent a major tightening in... 6th October 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Bank to announce more easing in November The RBA kept policy settings unchanged today but signaled that more stimulus is forthcoming. We now expect the Bank to cut the cash rate target, the 3-year yield target and the interest rate on the... 6th October 2020 · 3 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
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 New Zealand - Lower spending by National would be a drag Jacinda Ardern’s incumbent Labour party looks set to win a solid victory at New Zealand’s upcoming election. That might keep business confidence subdued, but it probably wouldn’t be as much of a drag... 9th September 2020 · 4 mins read
