Australia & New Zealand Economics Update Australia - Stealth QE doesn’t let RBA off the hook Proposals by the banking regulator and the RBA that banks will need to hold more government bonds could be interpreted as financial repression. However, the surge in the outstanding stock of... 8th September 2020 · 3 mins read
Australia & New Zealand Economics Weekly Withdrawal of policy support a headwind to activity With a record plunge in output, Australia entered its first recession in 29 years last quarter. Huge public support payments resulted in an increase in both corporate profits and household income and... 4th September 2020 · 4 mins read
Australia & New Zealand Data Response Australia - Retail Sales (Jul.) Retail sales were 12% above pre-virus levels in July but the closure of non-essential shops in Victoria will weigh heavily on spending in August. That means that sales won’t rise all that much in Q3... 4th September 2020 · 2 mins read
Australia & New Zealand Data Response Australia - International Trade (Jul.) The fall in export values in July is consistent with our view that exports won’t rebound much in Q3, but the jump in import values suggests that domestic demand is now on the mend. 3rd September 2020 · 2 mins read
Australia & New Zealand Data Response Australia - GDP (Q2) Australia’s GDP fell by more than most had anticipated in Q2 but we think it will rebound marginally in Q3 despite the tightening of restrictions in Victoria. 2nd September 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - RBA may still attempt to lower long-term yields The RBA today expanded its Term Funding Facility which should contribute to continued strong growth in the money supply. And while it didn’t indicate that additional stimulus is forthcoming, we still... 1st September 2020 · 3 mins read
Australia & New Zealand Data Response Australia - CoreLogic House Prices (Aug.) The housing downturn deepened further in Melbourne in August and continued in Sydney but seems to be abating elsewhere. We reiterate our forecast that house prices across the eight capital cities will... 1st September 2020 · 2 mins read
Australia & New Zealand Economics Update Resilience in Australia’s corporate profits unlikely to last The surge in corporate profits in Q2 happened despite a large drop in sales and mostly reflects the impact of the JobKeeper wage subsidy. With that subsidy being scaled back, corporate profits should... 31st August 2020 · 2 mins read
Australia & New Zealand Economics Weekly Economy may have kept growing in Q3 The modest fall in private investment and the continued surge in retail sales set a high bar for economic activity in Q3, when tough restrictions will have resulted in a slump in consumption and... 28th August 2020 · 7 mins read
Australia & New Zealand Chart Pack Lockdown fatigue is making restrictions less effective In Australia, the lockdown in Melbourne in July was of similar intensity to the initial lockdown in April. Even so, retail sales only fell by 2% m/m in Victoria which still left them around 2% above... 27th August 2020 · 11 mins read
Australia & New Zealand Data Response Australia - Private Capex Survey (Q2) Both machinery and equipment investment as well as construction investment fell less than we had anticipated in Q2 which suggests that the contraction in GDP wasn’t as deep as we thought. 27th August 2020 · 2 mins read
RBA Watch Bank to resume bond purchases in earnest The Reserve Bank of Australia isn’t keen on providing more monetary stimulus and instead wants the government to do the heavy lifting. As such, the Bank will certainly keep policy settings unchanged... 25th August 2020 · 7 mins read
Australia & New Zealand Economics Weekly Risk to overall trade from China is limited China has launched an anti-dumping investigation into Australian wine imports which could result in costly tariffs on Australian wine before long. But the bulk of Australia’s exports to China are LNG... 21st August 2020 · 5 mins read
Australia & New Zealand Economics Weekly Unemployment to rise in both countries Australian employment rose in July but more timely data suggest it may have started to decline since then. That makes sense given the renewed and tighter lockdown in Melboune. And we expect further... 14th August 2020 · 5 mins read
Australia & New Zealand Data Response Australia - Labour Market (Jul.) The pick-up in employment in July is likely to unwind in the coming months as the stricter lockdown in Victoria weighs on the labour market. 13th August 2020 · 2 mins read
Australia & New Zealand Economics Weekly Implications of Victoria’s strict lockdown The state of Victoria isn’t getting its virus outbreak under control and imposed draconian restrictions on economic activity this week. These will of course undermine the recovery, but they also mean... 7th August 2020 · 7 mins read