Australia & New Zealand Economics Update Australia - Mortgage defaults may keep rising Banks’ housing lending standards remain tight. But this hasn’t prevented housing arrears from climbing to fresh highs as household balance sheets are stretched. And given that we expect the... 15th January 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - Bushfires may reduce Q1 GDP by 0.1% The deadly bushfires that are ravaging Australia are first and foremost a human tragedy. But there are economic effects to consider, too. We suspect that the impact on consumption and working hours... 7th January 2020 · 4 mins read
Australia & New Zealand Economics Update Government remains reluctant to loosen fiscal policy Australia’s government pledged to increase spending in today’s Budget update. And its pessimistic forecasts for nominal GDP growth suggest that tax revenue may continue to surprise on the upside... 16th December 2019 · 3 mins read
Australia & New Zealand Economics Update Our key calls for 2020 We think that GDP growth in both Australia and New Zealand will fall short of expectations, forcing both the RBNZ and the RBA to cut interest rates more sharply than most expect. The consensus is that... 10th December 2019 · 4 mins read
Australia & New Zealand Economics Update New Zealand - Stable financial system allows RBNZ to cut rates The Reserve Bank of New Zealand’s decision to leave mortgage lending restrictions unchanged and tighten capital requirements means that lending and house prices are unlikely to surge in 2020. As such... 5th December 2019 · 4 mins read
Australia & New Zealand Economics Update RBA will have to ease policy further The RBA turned more optimistic when it kept rates unchanged today but we think that further stimulus will be required before long. We reiterate our long-held view that the Bank will cut rates to 0.25%... 3rd December 2019 · 3 mins read
Australia & New Zealand Economics Update Share buybacks are not to blame for weak investment The recent surge in stock buybacks has largely been driven by mining and financial firms and therefore can’t explain the weakness in non-mining investment. Non-mining profit growth should rebound a... 18th November 2019 · 4 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ to cut rates to 0.5% in 2020 The Reserve Bank of New Zealand sounded cautious when it left rates on hold today and we believe that a deterioration in the economy will force the Bank to 0.5% by early next year. 13th November 2019 · 3 mins read
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
