Australia & New Zealand Economics Update RBA to start hiking in June The RBA still sounded dovish when it kept interest rates unchanged today. However, we suspect that another upside surprise in Q1 inflation will convince the Bank that tighter policy is needed even if... 1st March 2022 · 3 mins read
Australia & New Zealand Economics Update Hawkish RBNZ will eventually need to reverse course The RBNZ sounded hawkish when it lifted rates today suggesting the OCR will rise further than we had previously anticipated. But a more aggressive hiking cycle will be an even bigger headwind to the... 23rd February 2022 · 3 mins read
Australia & New Zealand Economics Update Australia - Slump in fertility need not slow population growth The sharp drop in the fertility rate during the pandemic has already started to reverse. And even if it is sustained, the government will be able to offset a slower natural increase with higher net... 14th February 2022 · 3 mins read
Australia & New Zealand Economics Update RBA to hike rates to 1.75% Continued strength in underlying inflation and activity will prompt the Reserve Bank of Australia to start hiking rates in June. And we now expect the Bank to lift the cash rate to 1.75% by August... 10th February 2022 · 4 mins read
Australia & New Zealand Economics Update RBA ends QE; first rate hike will come in August The RBA today ended its bond purchases, revised up its inflation forecasts and no longer signalled that wage growth needs to be “materially higher” to meet its inflation target on a sustained basis... 1st February 2022 · 3 mins read
Australia & New Zealand Economics Update RBA probably won’t hike before the May election Trimmed mean inflation will probably climb above the upper end of the RBA’s 2-3% target band in Q1, which would add to the case for the RBA to start hiking rates in May. However, the RBA hasn’t... 26th January 2022 · 3 mins read
Australia & New Zealand Economics Update Our key calls for 2022 We think that GDP growth in Australia will surprise to the upside. But with wage growth only approaching the 3% watermark the RBA would like to see by year-end, we expect the Bank to keep rates on... 11th January 2022 · 3 mins read
Australia & New Zealand Economics Update Australia - Omicron will add to upward pressure on inflation The Omicron variant will probably result in a stagnation in consumption this quarter. However, by worsening supply shortages it will only add to the upward pressure on inflation. The upshot is that it... 6th January 2022 · 3 mins read
Australia & New Zealand Economics Update Australia - Government yet to deliver pre-election spending boost The government unveiled only modest increases in spending in today’s fiscal update. And while the unemployment rate has now reached levels where the Treasurer has pledged to start repairing the public... 16th December 2021 · 3 mins read
Australia & New Zealand Economics Update Australia moving closer to digital Aussie dollar The Reserve Bank of Australia and the Australian government are keen to explore the benefits of a retail central bank digital currency. But with pilot projects yet to start, we doubt that an eAud will... 9th December 2021 · 4 mins read
Australia & New Zealand Economics Update RBA to hike rates by less than markets anticipate The RBA still sounded dovish when it kept policy unchanged policy. We think that rates will rise earlier than the Bank anticipates but later and by less than what the financial markets price in. 7th December 2021 · 3 mins read
Australia & New Zealand Economics Update RBNZ will hike rates to 2.0% next year While the RBNZ only hiked rates by 25bps at today’s meeting, it is set to continue lifting rates next year. However, we think a slowdown in the economy will end the Bank’s hiking cycle with the OCR at... 24th November 2021 · 3 mins read
Australia & New Zealand Economics Update Australia - Rate hikes will result in housing downturn High household debt will magnify the impact of interest rate hikes on the housing market and we now expect prices across the eight capital cities to fall by 5% from H2 2023. The upshot is that the RBA... 24th November 2021 · 3 mins read
Australia & New Zealand Economics Update RBA recapitalisation would lift public debt Rising interest rates will result in the RBA making further losses in the years ahead. The Bank’s existing reserves should be enough to absorb those losses in a benign scenario, but the Bank will stop... 9th November 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- The impact of rate hikes on household finances If the RBA hiked rates by nearly 200bp as the financial markets were anticipating until recently, households’ debt servicing burden would hit an all-time high and housing would become the least... 3rd November 2021 · 3 mins read
Australia & New Zealand Economics Update Patient RBA set to hike rates only gradually The RBA abandoned its yield target and its pledge that rates will remain low until 2024 today, but still sounded dovish. While the financial markets expect the first rate hike in May next year, we... 2nd November 2021 · 3 mins read
