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
Australia & New Zealand Economics Update New Zealand - Capital requirement concerns are overblown Commercial banks in New Zealand have kicked up a fuss over a proposal by the Reserve Bank to increase the level of capital the banks are required to hold. By contrast, we believe the new rules won’t... 25th July 2019 · 4 mins read
Australia & New Zealand Economics Update Benefits from lower company tax rate would be small Australia’s corporate tax rate remains one of the highest in the world. However, the boost to GDP growth from lowering it towards the levels seen elsewhere would probably be quite small. 24th July 2019 · 4 mins read
Australia & New Zealand Economics Update State infrastructure spending won’t come to the rescue The federal government has urged state governments to step up infrastructure spending. But given the deterioration in their finances, we suspect that states are more likely to reduce capital spending. 22nd July 2019 · 2 mins read
Australia & New Zealand Economics Update RBA will probably cut rates to 0.5% While the RBA lowered the cash rate to 1.0% at today’s meeting, it signalled that it won’t ease policy any further for now. However, we think that the Bank remains too optimistic about the outlook for... 2nd July 2019 · 3 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ will probably cut rates to 1.0% The RBNZ’s dovish tone supports our view that the Bank will cut rates again before the year is out. In fact, we now think the Bank will cut at its next meeting in August, and once more at its November... 26th June 2019 · 3 mins read
Australia & New Zealand Economics Update Banks still likely to pass on rate cut in full Some of Australia’s banks have lowered mortgage rates by less than the reduction in the RBA’s cash rate. That’s hard to justify in light of the recent fall in funding costs. We think that mortgage... 5th June 2019 · 1 min read
Australia & New Zealand Economics Update RBA may have to cut rates to 0.75% We think that today’s 25bp rate cut may be followed by two additional rate cuts before the year is out. Combined with renewed falls in iron ore prices, that suggests that the Australian dollar may... 4th June 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - Higher spending may provide a small economic boost Significant increases in operating and capital spending are a welcome takeaway from today’s Budget. But the economic impact is likely to be modest and the government is still expected to be a drag on... 30th May 2019 · 1 min read
