Australia & New Zealand Economics Weekly

Antipodean central banks to part ways on policy

A new survey of businesses shows that New Zealand's retail industry is in dire straits. Given the sizeable contribution of retail trade to employment, the risk is that the labour market will...

26th July 2024 · 5 mins read

Australia & New Zealand Economics Weekly

RBNZ now likely to start cutting rates in August

Given the recent slate of weak economic data we now expect the RBNZ to start loosening policy in August, rather than in November as we were previously predicting. For one thing, timely activity data...

19th July 2024 · 4 mins read

Australia & New Zealand Economics Weekly

Despite some snags, inflation will cool in earnest

Administered price inflation is looking to be somewhat sticky in Australia, reflecting a combination of tax increases on select goods and elevated cost pressures across a range of public services. On...

12th July 2024 · 5 mins read

Australia & New Zealand Economics Weekly

Softening domestic demand will keep RBA from hiking

With inflation risks still running high, the Reserve Bank of Australia has been reluctant to drop its tightening bias. However, we still expect the Board to leave rates on hold at its upcoming August...

5th July 2024 · 4 mins read

Australia & New Zealand Economics Weekly

RBA won’t loosen policy before mid-2025

Following the upside surprise in the May CPI data released this week, markets are now pricing in a nearly two-in-five chance that the RBA will hand down a 25bp hike by year-end. But there are good...

28th June 2024 · 4 mins read

Australia & New Zealand Economics Weekly

Slowdown in activity not due to supply shortages

Some commentators have been arguing that the recent weakness in economic activity reflects a shortfall of supply rather than weaker demand. However, business surveys suggest that supply constraints...

21st June 2024 · 5 mins read

Australia & New Zealand Economics Weekly

RBA will look past impact of energy rebates

This week the Queensland government followed in the footsteps of the Western Australian government and the Commonwealth by announcing significantly more generous energy subsidies for households. With...

14th June 2024 · 5 mins read

Australia & New Zealand Economics Weekly

National accounts on balance dovish

The upward revisions to consumption mean that household spending has more momentum than previously thought and raise the risk that households will spend most of the income tax cuts due on 1 st July...

7th June 2024 · 4 mins read

Australia & New Zealand Economics Weekly

Reluctance to inflict pain comes back to bite the RBA

We aren't convinced that the further pick-up in trimmed mean inflation in the Monthly CPI Indicator in April will be replicated in the quarterly measure that the Reserve Bank of Australia considers...

31st May 2024 · 4 mins read

Australia & New Zealand Economics Weekly

Weaker consumption would lift risk of earlier rate cut

Whereas the Reserve Bank of Australia expects the household savings rate to rise over the course of this year, we think that households will lift real consumption alongside a likely rebound in real...

24th May 2024 · 5 mins read

Australia & New Zealand Economics Weekly

Government leaves RBA to go it alone

Contrary to the claims made by Treasurer Jim Chalmers, measures in the 2024/25 Budget will do little to alleviate price pressures. That means the onus of bringing inflation under control will fall...

17th May 2024 · 4 mins read

Australia & New Zealand Economics Weekly

RBA on an extended pause, budget in the spotlight

Although the RBA left rates unchanged at its meeting this week, Governor Bullock stated that the Board was prepared to raise rates if it had to. Against this backdrop, there have been concerns from...

10th May 2024 · 6 mins read

Australia & New Zealand Economics Weekly

Central banks won’t breathe easy just yet

New Zealand's labour market was in worse shape last quarter than most had anticipated. What's more, with the economy clearly struggling, labour market slack is likely to rise further. However, with...

3rd May 2024 · 4 mins read

Australia & New Zealand Economics Weekly

RBA more likely to hike than not

The case for the RBA to tighten policy is growing increasingly compelling. Underlying inflation is all but certain to overshoot its current forecast. Services inflation, which has long been a concern...

26th April 2024 · 5 mins read

Australia & New Zealand Economics Weekly

Interest rate purgatory to continue for a while

Much to the RBNZ's chagrin, inflation in New Zealand continued to have a four handle last quarter. The main culprit was non-tradables inflation, which remained uncomfortably high, at 5.8%. With the...

19th April 2024 · 5 mins read