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 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 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
Australia & New Zealand Economics Update Would negative rates work in New Zealand? Negative interest rates would not necessarily weaken the exchange rate, but they would almost certainly reduce bank lending rates. While they could result in lower lending margins, New Zealand’s banks... 20th August 2020 · 4 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ is not done loosening yet The Reserve Bank of New Zealand (RBNZ) further expanded its quantitative easing programme at today’s meeting and we think the Bank will cut rates into negative territory next year. 12th August 2020 · 3 mins read
Australia & New Zealand Economics Update How far will Australian house prices fall? We predicted four months ago that Australian house prices would fall by 5-10% from their peak. The short-lived nature of the recent downturn and the fact that affordability is looking increasingly... 4th August 2020 · 2 mins read
Australia & New Zealand Economics Update RBA will have to expand asset purchases in earnest The RBA turned more pessimistic about the outlook for the economy when it kept policy settings unchanged today and we think it will engage in additional asset purchases before long. 4th August 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - State of disaster to slow recovery to a crawl The additional restrictions on activity imposed in Victoria this week to curb the renewed surge in virus cases will cause the recovery in output to slow markedly in Q3. 3rd August 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Soaring public debt unlikely to hold back recovery Today’s fiscal update was a damp squib as the Treasurer didn’t present fiscal forecasts beyond June 2021 and didn’t unveil fresh fiscal support. While the government’s current forecasts are very close... 23rd July 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - JobKeeper extension to keep lid on unemployment The government will extend the JobKeeper wage subsidy by six months. Unemployment benefits will be made less generous which should encourage many of those having dropped out of the labour force to... 21st July 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - RBA may yet have to expand bond purchases The RBA sounded more optimistic when it left policy settings unchanged today. But with the recovery set to remain bumpy and inflation likely to weaken more sharply than the Bank is anticipating, we... 7th July 2020 · 3 mins read
Australia & New Zealand Economics Update Shift to online spending should outlast virus impact Online sales surged during the lockdown and rose further even as the Australian and New Zealand economies were opening up again. We suspect online sales will remain high which means measures of... 6th July 2020 · 2 mins read
Australia & New Zealand Economics Update A look at Australia’s corporate balance sheets We estimate that the revenues of firms in most sectors were still too low in mid-June to generate profits. If those conditions persisted, nearly one-third of firms would run out of cash by the end of... 25th June 2020 · 4 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ to go negative in 2021 The Reserve Bank of New Zealand (RBNZ) sounded fairly balanced when it left policy settings unchanged today. But we still think the Bank will cut rates into negative territory next year. 24th June 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Sugar-high in consumption may not last Consumer spending is bouncing back more strongly than we had anticipated. However, that partly reflects pent-up demand and the strong support from government initiatives. Employment income has slumped... 22nd June 2020 · 3 mins read
Australia & New Zealand Economics Update Australia-China trade tensions unlikely to boil over The rising trade tensions between Australia and China in recent weeks are unlikely to meaningfully damage Australian exports. While China may introduce tariffs on Australian coal, it is unlikely to... 16th June 2020 · 3 mins read
