Filtered by Subscriptions: Australia & New Zealand Economics Use setting Australia & New Zealand Economics
The recent improvement in Australia’s labour market was maintained in December, which should go some way to relieving the current downward pressure on equity prices and the Australian dollar. … Australia Labour Market …
14th January 2016
While we remain more concerned than most about the Australian economy, we don’t think that the recent sharp falls in equity prices will filter through into much weaker economic growth. … Equity price falls won’t lead to a much weaker …
11th January 2016
The first week of the new year has set the tone for what we think will be another disappointing year for Australia. While we are not too concerned by the latest developments in China, there is a clear risk that global events will be a bigger drag on …
8th January 2016
The 0.4% m/m rise in retail sales values in November shows that consumer spending maintained its momentum in the run up to the crucial Christmas shopping period. And it probably means that consumption growth remained healthy in the fourth quarter. … …
November’s international trade and building approvals figures show that two important supports of the economy softened towards the end of last year. This reinforces our view that GDP growth in the fourth quarter won’t live up to the high bar of 0.9% q/q …
7th January 2016
A surge in LNG exports means that, despite a slowdown in the growth of iron ore exports, resources exports will probably continue to offset some of the ongoing falls in mining investment. That said, there’s a danger that LNG exports won’t live up to …
6th January 2016
Australia and New Zealand both staged impressive rebounds in the third quarter, with GDP rising by 0.9% q/q in each economy on the back of a large boost from net exports. However, neither economy will be able to sustain this strength for long. Currency …
22nd December 2015
Our decent forecasting performance in 2015 means we are not too worried by some of our forecasts for 2016 being very different to the consensus. Our big success this year was accurately forecasting the sharp weakening in both the Australian and New …
18th December 2015
The recent resurgence in activity in both Australia and New Zealand is not the start of a sustained period of strong GDP growth. While the near-term outlook has improved, GDP growth in both economies won’t accelerate in 2016 from about 2.3% in 2015. The …
17th December 2015
The impressive rebound in GDP growth in the third quarter does not mean that New Zealand is out of the woods. With the full hit from the plunge in dairy prices still to be felt, growth will be weaker in the fourth quarter and during most of next year too. …
The decision by the Treasurer to use the Mid-Year Economic and Fiscal Outlook (MYEFO) to draw attention to the deterioration in the fiscal position triggered by the weak economic backdrop is one that could come back to haunt him. While it conveniently …
15th December 2015
A variety of forward-looking indicators suggests that house price inflation has well and truly peaked and that a sizeable slowdown lies ahead. House price inflation could even grind to a complete halt. … Four charts on what’s next for house price …
14th December 2015
In the upcoming fiscal update, the Australian Treasurer is going to have to admit that the cumulative budget deficit over the next four years is going to be some $30bn bigger than expected in May’s Budget. The elusive budget surplus is therefore drifting …
11th December 2015
November’s labour market data are either a major mirage or a minor miracle. We think that the truth lies somewhere in between, with conditions improving but not quite as much as the figures suggest. … Australia Labour Market …
10th December 2015
After cutting interest rates today from 2.75% back to the record low of 2.50% seen during the Global Financial Crisis, the Reserve Bank of New Zealand sent a strong signal that it doesn’t think rates need to fall further. We think it will be proved wrong, …
Despite the modest fall back in the Westpac measure of consumer confidence in December, from 101.7 in November to 100.8, we don’t expect this to be the beginning of a downward trend as the buoyant labour market and falling petrol prices should continue to …
9th December 2015
The Australian economy has continued to perform reasonably well given the very testing set of circumstances and has comfortably outperformed other commodity producers. But we don’t expect GDP growth to accelerate by much next year, if at all, as net …
4th December 2015
The acceleration in retail sales growth in October is very timely for retailers, who will be rubbing their hands at the idea that households are becoming more willing to open their wallets ahead of the crucial Christmas shopping season. … Australia …
The Reserve Bank of New Zealand will probably cut interest rates by 0.25%, from 2.75% to 2.50%, at the policy meeting on Thursday 10th December. What’s more, and despite the release of some positive economic news since the Board last met, we believe that …
3rd December 2015
The Australian economy isn’t as strong as the surge in GDP in the third quarter suggests, as a large boost to growth from net exports hides the worrying contraction in domestic demand. While GDP growth in 2015 as a whole will now be better than we had …
2nd December 2015
Even though the Reserve Bank of Australia has now left interest rates on hold at 2.0% for seven meetings and appears to be going cold on the idea of further cuts, we still think that a weakening in the outlook for both activity and inflation will prompt …
1st December 2015
The latest data on net exports and government spending/investment suggest that GDP growth in the third quarter was a little bit stronger than we thought at around 0.9% q/q. This supports the widespread view that the RBA will leave rates at 2.0% at the …
Even though the recent comment by the Reserve Bank of Australia Governor that everyone should “chill out” was clearly said in jest, it looks a little misplaced when we have since found out that capital expenditure is falling off a cliff. The absence of …
27th November 2015
The plunge in private capital expenditure in the third quarter suggests that GDP growthwas a little weaker than we had been expecting and, more worryingly, that non-mininginvestment is not filling the hole left behind by the end of the mining boom. … …
26th November 2015
Economic activity in both Australia and New Zealand appears to have been pretty robust in the third quarter, with the latest data pointing to gain in GDP of around 0.7% q/q and 1.0% q/q respectively. That would be much improved from the 0.2% and 0.4% …
The flow of positive economic news since the last Reserve Bank of Australia (RBA) meeting makes it a sure bet that the RBA will leave rates on hold at 2.0% for the seventh consecutive month when the Board meets on Tuesday 1 st December. The likelihood of …
24th November 2015
If the recent improvement in Australia’s labour market is sustained, then wage growth will soon accelerate from its current 17-year low. An increase in productivity growth at the same time would keep inflation low, thereby ensuring that real wages and …
20th November 2015
Although GDP growth probably rebounded in the third quarter, New Zealand’s economy isn’t in the clear just yet as the full impact of the collapse in the dairy price is still working its way through the system. This will prevent a sustained rebound until …
19th November 2015
The Reserve Bank of Australia will have been pleased to see more evidence that the housing market is cooling at the same time that the outlook for business investment is improving. If recent trends continue then it won’t be long before, for the first time …
13th November 2015
The strength of Australia’s labour market in October builds on other evidence that suggests the economy has made some big leaps forward in recent months. It diminishes the chances of further rate cuts, at least in the near-term. … Australia Labour Market …
12th November 2015
The further rise in consumer confidence in November, to a six-month high, suggests that households are playing a part in the recent “firming” in activity. … Consumer Confidence …
11th November 2015
By highlighting the recent “firming” in activity at the same time as emphasising that there is scope to cut interest rates further, the Reserve Bank of Australia has managed to support confidence without strengthening the dollar. A renewed weakening in …
6th November 2015
September's retail sales and international trade figures support the RBA's view that economic conditions have recently "firmed". They suggest that GDP growth may have rebounded from the dismal 0.2% q/q in the second quarter to a much more respectable 0.7% …
4th November 2015
The stark deterioration in labour market conditions in New Zealand in the third quarter pretty much guarantees that the RBNZ will cut rates to 2.5% at the meeting in December, from 2.75% now. What's more, it supports our view that rates will then fall all …
Although the Reserve Bank of Australia (RBA) once again decided to leave interest rates on hold at 2.0%, the new line in the statement that "the outlook for inflation may afford scope for further easing of policy" supports our view that interest rates …
3rd November 2015
The further fall in underlying inflation in Australia in the third quarter could be the start of a period of persistently low inflation that plays a role in prompting the Reserve Bank of Australia to cut interest rates to 1.5% next year. Inflation on the …
2nd November 2015
It is surprising how the recent economic narrative for Australia and New Zealand is similar to the relative performance of the Wallabies and the All Blacks on the rugby field. If this continues, then our forecast that GDP in 2017 will grow by 3.5% in New …
30th October 2015
Today's decision by the Reserve Bank of New Zealand (RBNZ) to leave interest rates at 2.75% is just a pause in a loosening cycle that we believe will end with rates falling to 2.00%. And the news that the RBNZ is not happy with the recent strengthening in …
29th October 2015
The tightening in monetary conditions triggered by the recent rises in mortgage rates by the major banks and the strengthening in the dollar is unlikely to prompt the Reserve Bank of Australia (RBA) to cut interest rates from 2.0% at the policy meeting on …
27th October 2015
Our forecast that underlying inflation in Australia will fall below the Reserve Bank’s 2-3% target range next year suggests that inflation will soon start to have a bigger influence on policy. Although there are a number of factors that could prompt the …
23rd October 2015
Although the Reserve Bank of New Zealand (RBNZ) will probably leave interest rates on hold at 2.75% at the policy meeting on Thursday 29 th October, this will just be a pause in the loosening cycle rather than the end. Our forecast that rates will fall to …
22nd October 2015
Australia is set to overtake Qatar as the world’s largest LNG supplier by 2018. However, recent trends in energy markets pose some headwinds for LNG exporters. In particular, the slump in oil prices has significantly reduced the price of Australia’s …
16th October 2015
The CPI data for the third quarter were not weak enough to make a rate cut at the RBNZ's policy meeting in late October a certainty. But with the full effects of the recent slowdown in economic growth yet to be felt, we think that persistently low …
While the fall in employment in September is unlikely to significantly alter the RBA's view of the economy, we think that a sustained weakening in the labour market will contribute to the RBA cutting interest rates from 2.0% now to 1.5% next year. … …
15th October 2015
The rebound we expect in China over the next few quarters should come as a relief to Australian policymakers and many investors. But long-run prospects for iron ore demand, which makes up more than half of Australia’s exports to China, remain gloomy. The …
9th October 2015
By leaving interest rates on hold at 2.0% for the fifth month in a row today, the Reserve Bank of Australia (RBA) demonstrated that the recent falls in equity prices have not increased its appetite for further rate cuts. We expect that a more general …
6th October 2015
While we remain concerned about the outlook for the Australian economy, we think it will continue to outperform other commodity producers such as Canada, Brazil and Norway. Australia’s labour market will probably remain stronger than those elsewhere, its …
2nd October 2015
Concerns over the health of China’s economy and the fall in domestic equity prices are unlikely to prompt the Reserve Bank of Australia (RBA) to cut interest rates from 2.0% at the meeting on Tuesday 6th October. That said, over the coming months we …
29th September 2015
While we remain more concerned than most about the Australian economy, the latest fall in equity prices won’t significantly restrain consumption growth. There is plenty of scope for households to absorb the hit to wealth by reducing their saving rate …
25th September 2015
Although we wouldn’t recommend placing too much weight on the quarterly rate of GDP growth in any one quarter, the respective 0.2% and 0.4% rises in Australia and New Zealand in the second quarter mark a clear slowdown fromthe rates of the previous two …
24th September 2015
