RBNZ Watch New Zealand - Don’t expect a change in rates for at least three years The Reserve Bank of New Zealand will keep interest rates unchanged at 1.75% at the policy meeting on Thursday 8th November, with recent encouraging economic data making a cut less likely. Even so, we... 1st November 2018 · 1 min read
RBA Watch RBA will hold its horses until late in 2020 The Reserve Bank of Australia (RBA) will welcome the continued tightening of the labour market when it holds interest rates steady at 1.50% on Melbourne Cup Day, which falls on Tuesday 6th November... 1st November 2018 · 1 min read
Australia & New Zealand Data Response International Trade (Sep.) Continued solid growth in export volumes suggests that the trade war isn’t yet acting as a major drag for Australia’s export sector. In fact, we think that the weaker exchange rate will result in a... 1st November 2018 · 1 min read
Australia & New Zealand Data Response CoreLogic House Prices (Oct.) The continued fall in house prices in October is consistent with our view that prices will ultimately drop by at least 12%, making the current downturn the longest and deepest in Australia’s modern... 1st November 2018 · 1 min read
Australia & New Zealand Data Response Consumer Prices (Q3) The drop in inflation in the third quarter back below the 2-3% target rate won’t frighten the RBA too much, but it does look more like a scary Halloween trick than a treat. We believe the RBA will... 31st October 2018 · 1 min read
Australia & New Zealand Economics Update House prices falls will weigh on consumer spending Households responded to rising house prices by lifting spending and we think they will eventually respond to falling prices with lower spending. This wealth effect may lower annual GDP growth by 0.3... 29th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Housing matters Falling equity and house prices have both made the news this week. But when it comes to what is going to influence the Australian economy, housing matters much more. The weakening housing market is... 26th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Full employment has not been achieved Even though the unemployment rate has fallen to the Reserve Bank of Australia’s 5.0% estimate of the natural rate, the RBA will still want to see signs of much faster wage growth before it hikes... 19th October 2018 · 1 min read
Australia & New Zealand Data Response Labour Market (Sep.) Whether or not the decline in the unemployment rate in September to the RBA’s estimate of the natural rate of 5.0% prompts the Bank to raise interest rates sooner depends on what happens to wage... 18th October 2018 · 1 min read
Australia & New Zealand Data Response New Zealand - Consumer Prices (Q3) The jump in inflation from 1.5% in Q2 to 1.9% in Q3 was largely driven by higher energy prices and won’t allow the RBNZ to conclude that underlying price pressures are strengthening. While Q3’s data... 16th October 2018 · 1 min read
Australia & New Zealand Economics Update Revisiting the fallout from the US-China trade war Even though Australia is strongly dependent on the health of China’s economy, it won’t suffer much from China’s escalating trade conflict with the US. If anything, in the near-term it will benefit... 15th October 2018 · 1 min read
Australia & New Zealand Economics Weekly Falling equities, rising petrol, climbing borrowing costs The recent plunge in equity prices, surge in petrol prices and rise in borrowing costs all triggered by developments overseas won’t hurt the Australian economy much. But they do add to other headwinds... 12th October 2018 · 1 min read
Australia & New Zealand Economic Outlook Missing the global tightening cycle Our forecasts suggest that by the time the Reserve Banks of Australia and New Zealand get round to raising interest rates from record lows, the US Fed will already be cutting them. We think that a... 10th October 2018 · 1 min read
Australia & New Zealand Economics Weekly RBA’s upbeat tone contrasts with downbeat data We doubt that the gap between the Reserve Bank of Australia’s relatively upbeat tone and the downbeat feel of the recent economic news will be sustained for long. We suspect the RBA may become a... 5th October 2018 · 1 min read
Australia & New Zealand Data Response Retail Sales (Aug.) The rebound in retail sales in August provides further evidence that households are still proving reasonably resilient to low income growth and falling house prices. But with house prices falling at... 5th October 2018 · 1 min read
Australia & New Zealand Data Response International Trade (Aug.) The small rise in the international trade surplus in August provides more evidence that the US-China trade war is not affecting Australia’s external sector. In fact, the recent weakening in the... 4th October 2018 · 1 min read
