Australia & New Zealand Economics Update Housing downturn will be deflationary Rent inflation is set to approach 10% as the surge in net migration coupled with lower home completions has pushed rental vacancy rates to record low. But that rise will be overwhelmed by the slowdown... 20th February 2023 · 2 mins read
Australia & New Zealand Economics Update RBA signals more tightening to come The RBA raised interest rates by another 25bp and signalled that further tightening will be needed. We’re sticking to our forecast that the Bank will lift the cash rate to an above-consensus 3.85% by... 7th February 2023 · 3 mins read
Australia & New Zealand Economics Update Housing supply shortages starting to ease The shortage of new housing caused by the government’s HomeBuilder grant is showing signs of easing. That means that the housing downturn should start to weigh on homebuilding in earnest and that new... 18th January 2023 · 2 mins read
Australia & New Zealand Economics Update Fixed-rate expiry large shock to household finances The full impact of the RBA’s aggressive tightening cycle on household finances hasn’t been felt yet because one-third of all mortgages have fixed-rates. Around 60% of those will expire next year and... 13th December 2022 · 3 mins read
Australia & New Zealand Economics Update RBA not backing away from rate hikes just yet The RBA today hiked the cash rate by 25bp as widely anticipated and while the statement was marginally less hawkish, we’re sticking to our view that the Bank will lift the cash rate to 3.85% by April. 6th December 2022 · 3 mins read
Australia & New Zealand Economics Update Long-term impact of energy price caps may be positive The proposed caps on domestic prices of thermal coal and natural gas are unlikely to be a major drag on mining investment because the bulk of coal and gas production is exported. And by helping to... 5th December 2022 · 4 mins read
Australia & New Zealand Economics Update Multi-employer pay deals add upside risks to inflation The proposed multi-employer wage agreements risk further fuelling inflation by disruptive industrial action. And while employers could circumvent them by striking traditional enterprise agreements... 24th November 2022 · 3 mins read
Australia & New Zealand Economics Update RBNZ will probably lift rates to 5.5% The Reserve Bank of New Zealand hiked the overnight cash rate by 75bp as most had anticipated but signalled a much higher peak in the OCR than in August. We’re now forecasting another 75bp hike in... 23rd November 2022 · 3 mins read
Australia & New Zealand Economics Update Energy price caps could knock off 1%-pt from inflation The proposed price caps on thermal coal and natural gas would knock off around one to 1.25%-pts from overall inflation though the full impact would only materialise in the second half of next year. 8th November 2022 · 4 mins read
Australia & New Zealand Economics Update RBA to lift rates more sharply than most expect The Reserve Bank of Australia hiked rates by 25bp today and the upward revision to its inflation forecasts are consistent with our view that rates will peak at an above-consensus 3.85%. However, we... 1st November 2022 · 3 mins read
Australia & New Zealand Economics Update Budget repair will worsen economic slowdown The Treasurer resisted the temptation to spend the tax windfall from high commodity prices in today’s Budget. But with high inflation lifting payments by at least as much as receipts, the government... 25th October 2022 · 3 mins read
Australia & New Zealand Economics Update 5% peak in OCR will worsen housing downturn This publication has been resent due to an error with the previous email. The continued strength in inflation will encourage the Reserve Bank of New Zealand to hike the overnight cash rate by 75bp in... 20th October 2022 · 3 mins read
Australia & New Zealand Economics Update Wealth effects pose downside risks to consumption Australia’s record housing downturn may not result in dwellings investment falling quite as sharply as we’re anticipating. However, the largest wealth destruction in Australia’s modern history poses... 17th October 2022 · 2 mins read
FX Markets Update We think the aussie and kiwi have a bit further to fall We expect the aussie and the kiwi to weaken further against the US dollar and trough around mid-2023. And while we don’t expect the aussie to outperform the kiwi as it has recently, we think it will... 12th October 2022 · 4 mins read
Global Economics Update From inflation crisis to financial crisis? Problems at California-based lender Silicon Valley Bank (SVB) have refocussed attention on financial sector risks. In light of this, we are resending a report from last October that provides a... 11th October 2022 · 5 mins read
Australia & New Zealand Economics Update RBNZ will hike all the way to 4.5% The Reserve Bank of New Zealand hiked the overnight cash rate by 50bp to 3.5% as widely anticipated and the hawkish tone of the statement is consistent with our forecast that rates will peak at 4.5%... 5th October 2022 · 4 mins read
