Australia & New Zealand Economics Update RBA to lift cash rate to 4.35%, cuts only in Q2 2024 The Reserve Bank of Australia lifted the cash rate by 25bp today and the hawkish tone of the statement suggests that the risks to our terminal rate forecast of 4.35% are tilted to the upside. Indeed... 6th June 2023 · 3 mins read
Australia & New Zealand Economics Update RBNZ signals tightening cycle is at an end The decision by the Reserve Bank of New Zealand to lift its official cash rate by 25bp, to 5.50%, was in line with what most had anticipated. However, with the Bank sounding more dovish than it has in... 24th May 2023 · 3 mins read
Australia & New Zealand Economics Update Rate cuts will prompt pause in quantitative tightening The RBA’s balance sheet has barely shrunk since it decided to stop reinvesting the proceeds from maturing bonds. While pressing ahead with quantitative tightening would make it easier for the Bank to... 16th May 2023 · 4 mins read
Australia & New Zealand Economics Update Fiscal consolidation is put on the backburner The 2023/24 Budget unveiled yesterday by Treasurer Jim Chalmers was something of a mixed bag. On the one hand, the modest spending measures proposed by the government will not break the bank, thanks... 10th May 2023 · 3 mins read
Australia & New Zealand Economics Update Tightening cycle over but rate cuts only in Q2 2024 The Reserve Bank of Australia retained its tightening bias when it lifted the cash rate by 25bp at today’s meeting, but we suspect that it won’t raise interest rates any further over the coming months... 2nd May 2023 · 3 mins read
Australia & New Zealand Economics Update Lowe unlikely to be reappointed as RBA Governor The recommendations by the RBA’s review panel unveiled today were broadly in line with what we had anticipated. While the 2-3% inflation target will be retained, sweeping changes to the Bank’s... 20th April 2023 · 4 mins read
Australia & New Zealand Economics Update Hawkish RBNZ will send New Zealand into recession The decision by the Reserve Bank of New Zealand to lift its official cash rate by 50bp, to 5.25%, came as an upside surprise, but we still think the end of the hiking cycle is approaching. In any case... 5th April 2023 · 3 mins read
Australia & New Zealand Economics Update RBA will deliver one final rate hike in May The Reserve Bank of Australia kept open the possibility of further tightening when it decided to leave its cash rate unchanged at 3.60% today. As such, we do still expect the RBA to deliver one final... 4th April 2023 · 5 mins read
Australia & New Zealand Economics Update Surging credit card spending not a cause for concern The surge in credit card spending over the past year hasn’t been any larger than the increase in overall consumer spending. And with personal credit accounting for a small share of overall credit, a... 27th March 2023 · 4 mins read
Global Economics Update What next after Credit Suisse? While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of... 20th March 2023 · 5 mins read
Australia & New Zealand Economics Update Financial system should withstand SVB shock Australian banks are unlikely to experience the same valuation losses that resulted in the demise of Silicon Valley Bank. The biggest risk is that a freezing up of overseas bond markets shuts down... 14th March 2023 · 4 mins read
Australia & New Zealand Economics Update RBA not done tightening yet The Reserve Bank of Australia signalled that further tightening will be needed when it hiked the cash rate to 3.60% today and we’re sticking to our forecast that the Bank will lift the cash rate to 4... 7th March 2023 · 3 mins read
Australia & New Zealand Economics Update Services inflation will remain stubbornly high With labour productivity falling the most on record over the past year, unit labour cost growth has surged even as hourly earnings growth has remained sluggish. While we expect productivity growth to... 6th March 2023 · 3 mins read
Australia & New Zealand Economics Update Dwellings investment won’t fall as sharply Although the fall in house prices slowed significantly in February, we are not convinced that Australia’s housing market is out of the woods yet. Even so, there are growing indications that dwellings... 2nd March 2023 · 3 mins read
Australia & New Zealand Economics Update Housing downturn not over just yet House prices bounced back in February, led by Sydney. While leading indicators point to an improvement in housing market activity, the RBA’s determination to raise interest rates further means that... 24th February 2023 · 3 mins read
Australia & New Zealand Economics Update RBNZ will stop hiking at 5.25% Even though the Reserve Bank of New Zealand slowed the pace of tightening at today’s meeting, it still signalled a peak in the overnight cash rate of 5.50% by the middle of this year. Our more... 22nd February 2023 · 4 mins read
