Australia & New Zealand Economics Weekly Activity holding up this year but will weaken in 2023 The latest data show that consumer spending is defying downbeat sentiment and rising interest rates by continuing to strengthen. Indeed, we have been arguing for some time that strong financial... 8th July 2022 · 6 mins read
Australia & New Zealand Economic Outlook Housing downturn raises recession risks With inflation rising even further than we had anticipated, both the RBNZ and the RBA will slam harder on the brakes than most anticipate. We expect policy rates to peak around 3.5% in both countries... 7th July 2022 · 25 mins read
Australia & New Zealand Data Response Australia International Trade (May 2022) The surge in the trade surplus in May suggests that net exports provided an even bigger boost to Q2 GDP growth than we had anticipated. But that boost should fade as the border reopening lifts outward... 7th July 2022 · 2 mins read
Australia & New Zealand Economics Update RBA to hike to around 3.5% but will cut in late-2023 The RBA sounded a little more cautious about the outlook for the economy when it hiked rates by 50bp today, but we suspect that further upside surprises to inflation will encourage it to eventually... 5th July 2022 · 3 mins read
Australia & New Zealand Economics Weekly Housing downturn to weigh on activity The housing downturn is now in full swing. While that hasn’t prevented a solid rise in consumption in Q2, we think falling wealth will be a drag on consumer spending next year. What’s more, our... 1st July 2022 · 6 mins read
Australia & New Zealand Data Response Australia CoreLogic House Prices (Jun.) The monthly decline in house prices in June was the largest since 2019 but is unlikely to be the sharpest decline in the current downturn. We think house prices will eventually fall by 15% from their... 1st July 2022 · 3 mins read
DM Markets Chart Pack We expect even higher yields and lower risky asset prices We think developed market government bond yields will rise further while equity and corporate bond prices fall further, as central banks press ahead with tightening and the global economy slows. Drop... 29th June 2022 · 8 mins read
Australia & New Zealand Data Response Australia Retail Sales (May 2022) The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead. 29th June 2022 · 2 mins read
RBA Watch RBA to keep hiking by 50bp for now The Reserve Bank of Australia will probably lift the cash rate by another 50bp in July and August before reverting to smaller 25bp hikes. However, the risks are tilted towards a prolonged period of... 28th June 2022 · 7 mins read
Australia & New Zealand Economics Weekly More 50bp hikes coming We agree with RBA governor Phillip Lowe that market pricing for the Cash rate looks too aggressive. But we also think the consensus is still too dovish. After all, Governor Lowe is starting to grow... 24th June 2022 · 5 mins read
Australia & New Zealand Economics Weekly Inflationary pressures keep building The big minimum wage hike announced by the fair work commission this week will lead to higher wage growth over the coming year. Given the tightness in the labour market and rising cost pressures... 17th June 2022 · 3 mins read
Australia & New Zealand Data Response Australia Labour Market (May 2022) The strong rise in employment in May will keep pressure on the RBA to continue its aggressive hiking cycle in the months ahead. World with Higher Rates - Drop-In (21 st June, 10:00 ET/15:00 BST): Does... 16th June 2022 · 2 mins read
Australia & New Zealand Economics Update Minimum wage rise will keep RBA hiking aggressively The 5.2% increase in the minimum wage announced by the Fair Work Commission will directly lift the Wage Price Index by around 0.7%-pt. But the increase will also contribute to upward pressure on wage... 15th June 2022 · 3 mins read
Australia & New Zealand Economics Weekly RBA could raise rates even faster than we anticipate We’ve long been arguing that the RBA will lift rates more sharply than most analysts anticipate and the RBA’s surprise 50bp rate hike this week is consistent with our view that rates will reach 3% by... 10th June 2022 · 5 mins read
Australia & New Zealand Chart Pack Steeper interest rate hikes and larger house price falls Hawkish shifts by the RBA and the RBNZ in recent weeks have prompted us to forecast an even more aggressive hiking cycle by both central banks in the months ahead. Both central banks hiked rates by... 9th June 2022 · 11 mins read
Australia & New Zealand Economics Update Housing downturn will prompt RBA rate cuts in 2023 With the RBA set to hike the cash rate to 3% by early-2023, we now expect house prices to fall by 15% from their April peak. While the economy has considerable momentum from reopening in the near-term... 8th June 2022 · 3 mins read
