Australia & New Zealand Economics Weekly RBA to end asset purchases in February While the Omicron variant poses some downside risks, Australia’s labour market has all but recovered from the recent lockdowns and we think that the unemployment rate will fall faster than the Reserve... 17th December 2021 · 4 mins read
Australia & New Zealand Data Response New Zealand GDP (Q3 2021) The fall in New Zealand’s output in Q3 will have partially unwound in Q4 as lockdowns were gradually eased. And the fact the fall in GDP was much smaller than the RBNZ’s forecast supports our view... 15th December 2021 · 3 mins read
Australia & New Zealand Economics Weekly Federal fiscal resilience masks state weakness Treasurer Josh Frydenberg will gloat when he unveils in the upcoming Mid-Year Fiscal and Economic Outlook that the federal deficit will be smaller in 2021/22 than expected despite the recent Delta... 10th December 2021 · 5 mins read
Australia & New Zealand Economics Weekly Omicron could add to inflationary pressure If Omicron were able to evade existing vaccines, a renewed period of lockdowns would be required which would force the RBA to step up its bond purchases. Inflation would fall initially as crude oil... 3rd December 2021 · 5 mins read
Australia & New Zealand Chart Pack Diverging outlook for monetary policy While the RBNZ has lifted interest rates by 50bp and signalled that as much as 200bp of tightening is still to come, the RBA’s central scenario remains that interest rates won’t be raised until 2024... 29th November 2021 · 11 mins read
Australia & New Zealand Economics Weekly Border reopening won’t ease labour shortages much Australia’s government isn’t keen on opening the immigration floodgates once the border reopens to migrants next year and we still expect the unemployment rate to fall to 4% by 2023. Nor do we expect... 26th November 2021 · 6 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 Weekly Wage growth and inflation to continue to strengthen RBA Governor Phillip Lowe doubled down on the view wage growth will remain too low to justify a rate hike anytime soon. But wages for workers on individual agreements is soaring. And we think wage... 19th November 2021 · 6 mins read
RBNZ Watch RBNZ to accelerate hiking cycle The New Zealand economy is clearly overheating. Measures of underlying inflation are mostly above the ceiling of the RBNZ’s target band. And employment is now above the Bank’s estimate of the maximum... 17th November 2021 · 7 mins read
Australia & New Zealand Economics Weekly Inflation will keep the RBA under pressure Business purchase costs in the October NAB survey rose to their strongest level since 2008, consistent with trimmed mean inflation of nearly 1.5% q/q. That probably overstates the strength in... 12th November 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBNZ set to hike by 50bp, RBA remains the archdove The exceptional strength of New Zealand’s mean that we now think the RBNZ will hike rates by 50bps in November and by a further 100bps next year, which would take the OCR to 2.0%. That’s above the... 5th November 2021 · 5 mins read
Australia & New Zealand Data Response New Zealand- Labour Market (Q3 2021) The decline in the unemployment rate to 3.4% should encourage the RBNZ to hike rates more aggressively than we had previously anticipated in the months ahead. 2nd November 2021 · 2 mins read
Australia & New Zealand Chart Pack Surging inflation puts pressure on monetary policy Trimmed mean inflation rose to 2.1% in Australia in Q3, the first time it has entered the RBA’s 2-3% target band since 2015. Even more strikingly, trimmed mean inflation in New Zealand rose to 4.4%... 29th October 2021 · 11 mins read
Australia & New Zealand Economics Weekly RBA set to ditch yield target next week The rise in trimmed mean inflation into the RBA’s 2-3% target band for the first time in six years has only added to the aggressive repricing in the outlook for the RBA’s policy rate over the past... 29th October 2021 · 7 mins read
Australia & New Zealand Economics Weekly Market pricing on RBA too aggressive Despite the rise in virus cases in recent weeks, strong inflation in New Zealand increases the pressure on the RBNZ to tighten policy further. While we are sticking to our forecast of a 25bp hike in... 22nd October 2021 · 6 mins read
Australia & New Zealand Data Response New Zealand- Consumer Prices (Q3) While we think the surge in inflation will start to abate in the year ahead, the strength will surely be worrying the RBNZ, supporting the case for further rate hikes. 18th October 2021 · 2 mins read
