Australia & New Zealand Economics Update RBA indicates further easing may be needed By signalling that inflation will remain below the lower end of its 2-3% target band for the foreseeable future, the RBA signalled that further easing is on the cards. Our view remains that the Bank... 8th November 2019 · 3 mins read
Australia & New Zealand Economics Update RBA still has more work to do The RBA reiterated its view that the economy had reached a gentle turning point when it left rates unchanged today. However, we think that the Bank’s forecasts for GDP growth and the labour market... 5th November 2019 · 3 mins read
Australia & New Zealand Economics Update Participation rate should continue to rise We estimate that the participation rate will rise by around 0.35ppt per annum over the next couple of years. That means that the economy needs to create around 300,000 additional jobs per annum to... 29th October 2019 · 3 mins read
Australia & New Zealand Economics Update Fiscal stimulus urgently needed but unlikely We estimate that a fiscal stimulus equivalent to 1.5% of GDP would still be consistent with maintaining Australia’s AAA-rating. Unfortunately, fiscal policy probably won’t come to the rescue, leaving... 23rd October 2019 · 3 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ to cut rates more sharply than most expect We now expect growth in New Zealand to ease from 2.2% in 2019 to 1.5% in 2020. Along with a rising unemployment rate, weak economic activity will prompt the RBNZ to cut rates twice next year. 9th October 2019 · 3 mins read
Australia & New Zealand Economics Update Cheap long-term loans wouldn’t replace QE Once interest rates approach their lower bound, the RBA could provide long-term loans to banks and link their interest rate to the amount of new lending those banks undertake. However, if the Bank... 7th October 2019 · 3 mins read
Australia & New Zealand Economics Update Natural unemployment rate probably still at 4% We still believe that the unemployment rate would have to fall to 4.0% to meet the RBA’s definition of full employment. With the actual unemployment rate now at 5.3% and rising, that means that the... 2nd October 2019 · 2 mins read
Australia & New Zealand Economics Update RBA to cut rates to 0.5% by year-end The RBA cut interest rates to 0.75% as widely anticipated and we think it will lower rates to 0.5% by the end of the year. Rates approaching the zero lower bound will inevitably invite speculation... 1st October 2019 · 3 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ to cut rates further The Reserve Bank of New Zealand sounded more comfortable with its position when it left rates on hold today but we still think the Bank will cut rates to 0.75% by early next year. 25th September 2019 · 3 mins read
Australia & New Zealand Economics Update Trade war still not a major threat to Australia The trade war has probably lowered Chinese demand for Australian exports by curbing investment in factories and warehouses. But the trade tensions have contributed to the weakening of the Australian... 11th September 2019 · 4 mins read
Australia & New Zealand Economics Update What do rising house prices mean for the economy? The recent strong pace of house price gains is unlikely to last as income growth is set to remain subdued. We expect house prices to rise by around 5% next year and in 2021. A rebound in house prices... 9th September 2019 · 4 mins read
Australia & New Zealand Economics Update Interest rates still likely to fall further The RBA sounded a little more optimistic when it left interest rates unchanged at today’s meeting. But with external headwinds intensifying and the labour market set to weaken further, we still expect... 3rd September 2019 · 3 mins read
Australia & New Zealand Economics Update The money supply is not what it used to be Growth in the money supply has picked-up in Australia but we don’t think the money supply has much of a relationship with economic activity. Even so, banks have started to ease lending standards which... 26th August 2019 · 2 mins read
Australia & New Zealand Economics Update Should we be worried about rising loan losses? Loan losses have remained low throughout the housing downturn but we suspect that they will pick up soon, driven by higher write-offs on corporate loans. However, loan losses tend to lag changes in... 22nd August 2019 · 4 mins read
Australia & New Zealand Economics Update New Zealand - 50 basis point cut not the end of easing by the RBNZ The Reserve Bank of New Zealand cut rates dramatically to 1.0% at today’s monetary policy meeting. But given our more pessimistic forecasts of the New Zealand economy, we don’t think that the Bank is... 7th August 2019 · 2 mins read
Australia & New Zealand Economics Update RBA not done easing yet The RBA adopted an easing bias when it left interest rates unchanged today. With the labour market set to loosen further, we expect the Bank to slash rates to 0.5% by early-2020. 6th August 2019 · 3 mins read
