Australia & New Zealand Economics Weekly The sky isn’t falling There have been concerns that the recent inversion of the US yield curve foreshadows a global downturn but we think that the recent easing in lending standards means the probability of a recession in... 23rd August 2019 · 5 mins read
Australia & New Zealand Economics Update Should we be worried about rising loan losses? Loan losses have remained low throughout the housing downturn but we suspect that they will pick up soon, driven by higher write-offs on corporate loans. However, loan losses tend to lag changes in... 22nd August 2019 · 4 mins read
Australia & New Zealand Economics Focus Current account won’t remain in surplus for long A lower cost of funding via foreign liabilities, a higher return on overseas assets and falling capital goods imports should all support Australia’s current account over the next couple of years... 20th August 2019 · 13 mins read
Australia & New Zealand Economics Weekly Outlook for labour market remains challenging The recent weakness in economic activity should start to weigh on jobs growth before long, pushing up the unemployment rate further and resulting in weaker wage growth. While a softer labour market... 16th August 2019 · 3 mins read
Australia & New Zealand Data Response Labour Market (Jul.) The strong rise in employment in July failed to make any inroads into the pool of unemployed workers. Employment growth is set to falter, pushing up the unemployment rate further before long. 15th August 2019 · 2 mins read
Australia & New Zealand Data Response Wage Price Index (Q2) Wage growth treaded water in the second quarter and the recent loosening of the labour market suggests it will fall to 2% before long. 14th August 2019 · 2 mins read
Australia & New Zealand Data Response Impending house supply shortages to support prices The recent slump in dwelling starts means that housing supply will fall short of demand from next year. That suggests that house prices will continue to rise over the coming months. 8th August 2019 · 2 mins read
Australia & New Zealand Economics Weekly Don’t worry, there’s still more “in the tin” The 50 basis point cut by the RBNZ took markets by surprise this week and we now expect the Bank to cut rates to 0.75% by early next year. If the economic outlook deteriorates by considerably more... 8th August 2019 · 6 mins read
Australia & New Zealand Economics Update New Zealand - 50 basis point cut not the end of easing by the RBNZ The Reserve Bank of New Zealand cut rates dramatically to 1.0% at today’s monetary policy meeting. But given our more pessimistic forecasts of the New Zealand economy, we don’t think that the Bank is... 7th August 2019 · 2 mins read
Australia & New Zealand Economics Update RBA not done easing yet The RBA adopted an easing bias when it left interest rates unchanged today. With the labour market set to loosen further, we expect the Bank to slash rates to 0.5% by early-2020. 6th August 2019 · 3 mins read
Australia & New Zealand Data Response International Trade (Jun.) We estimate that net trade boosted GDP growth in Q2, providing a glimmer of hope amidst the bleak domestic outlook. 6th August 2019 · 2 mins read
Australia & New Zealand Data Response New Zealand - Labour Market (Q2) The sharp fall in the unemployment rate is unlikely to prevent the RBNZ from cutting rates tomorrow given that labour market data are volatile and often prone to revision. What’s more, we expect the... 6th August 2019 · 2 mins read
Australia & New Zealand Economics Weekly Bond yields crashing to new lows Economic data this week confirmed that the Australian economy continues to underperform. Meanwhile, bond yields have been in freefall. In part, that reflects Governor Lowe’s comments last week that... 2nd August 2019 · 8 mins read
Australia & New Zealand Data Response Retail Sales (Jun./ Q2) The weakness in real retail sales in Q2 suggests consumption growth remained sluggish in the second quarter. That’s one reason why we expect GDP growth to slow from 2.8% in 2018 to just 1.5% this year... 2nd August 2019 · 2 mins read
RBNZ Watch Interest rates will be cut twice more this year The Reserve Bank’s Monetary Policy Committee sounded almost ready to cut rates at its last meeting in June. And developments since then will have done little to mollify the Bank’s concerns. So we... 1st August 2019 · 7 mins read
Australia & New Zealand Data Response CoreLogic House Prices (Jul.) House prices appear to be bottoming with an average increase in prices across the eight capital cities in July. We expect prices will remain around this level for the rest of 2019 before rising by 3%... 1st August 2019 · 2 mins read
