Australia & New Zealand Economics Update Recession in Australia is now very likely New comprehensive restrictions on travel mean that both Australia and New Zealand are headed for recession. We expect the Reserve Bank of New Zealand to follow up today’s emergency 75bp rate cut with... 16th March 2020 · 3 mins read
Australia & New Zealand Economics Weekly Lower oil prices are not great for Australians Lower oil prices and government transfer payments may boost household disposable incomes in the coming months. But we think the downturn in consumer confidence and the rising number of cases of the... 13th March 2020 · 5 mins read
Australia & New Zealand Economics Update Australian fiscal stimulus may avert a recession The large fiscal stimulus package unveiled today may be able to prevent a recession. But we still expect the RBA to cut rates to 0.25% and launch quantitative easing over the next few months. 12th March 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Counting the cost of the coronavirus outbreak In a moderate scenario where demand returns to pre-coronavirus levels by year-end, we estimate that the outbreak of the disease will knock off 1% from GDP growth this year. In a more severe scenario... 10th March 2020 · 4 mins read
Australia & New Zealand Economics Update Australia - Will the RBA launch a yield curve target? Most central banks that have introduced quantitative easing in recent years have done so by pledging to buy a certain amount of government bonds. Our base case is that the RBA will do the same when it... 9th March 2020 · 3 mins read
Australia & New Zealand Economics Weekly Grim outlook means RBA will launch QE before long Recent data show that the Australian economy was sputtering even before the coronavirus started to spread within the country in earnest. We now think the rising number of cases in Australia will cause... 6th March 2020 · 4 mins read
Australia & New Zealand Data Response Australia - Retail Sales (Jan.) Retail sales fell for the second consecutive month in January. And given that this happened before the coronavirus started to spread in Australia in earnest, the outlook for consumption remains weak. 6th March 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - Australian fiscal stimulus likely to be underwhelming We expect the Treasury to announce only a small fiscal package of around $2bn in response to the coronavirus outbreak. With economic activity slowing sharply and revenues undershooting expectations... 5th March 2020 · 3 mins read
Australia & New Zealand Data Response Australia - International Trade (Jan.) The small decline in the trade surplus in January masks larger weakness in both export and import values. And we think the coronavirus outbreak means that exports have further to fall in the coming... 5th March 2020 · 2 mins read
Australia & New Zealand Data Response Australia - GDP (Q4) GDP growth remained subdued at the end of last year, and given the fallout from the coronavirus outbreak we expect the economy to deteriorate further in 2020. 4th March 2020 · 2 mins read
Australia & New Zealand Economics Update Australia - RBA to cut rates to 0.25% in April With the impact of the coronavirus on economic activity set to intensify, we expect the RBA to follow up today’s 25bp rate cut with another 25bp cut in April. It looks increasingly likely that the... 3rd March 2020 · 3 mins read
Australia & New Zealand Economics Update Australia - Coronavirus raises pressure on RBA to cut rates The slump in China’s PMIs in February and the continued spread of the coronavirus beyond China has raised the odds that the RBA will cut interest rates at tomorrow’s meeting. On balance though, we... 2nd March 2020 · 3 mins read
Australia & New Zealand Data Response Australia - CoreLogic House Prices (Feb.) The rally in house prices continued in February and all the leading indicators suggest that prices will keep rising at a rapid pace. However, affordability is deteriorating rapidly and we expect price... 2nd March 2020 · 2 mins read
Australia & New Zealand Economics Weekly Surge in non-mining investment unlikely The capex survey for Q4 showed capital expenditure falling sharply at the end of last year. And while mining firms’ first estimate for capital spending in 2020/21 was very strong, non-mining firms are... 28th February 2020 · 8 mins read
Australia & New Zealand Data Response Australia - Private Capex Survey (Q4) We estimate that investment fell sharply, by 1.5% q/q in Q4. But firms’ expectations of a pick-up in nominal capital expenditure in the next financial year suggest the drag from private investment... 27th February 2020 · 2 mins read
Australia & New Zealand Chart Pack Threat from the coronavirus continues to grow We estimate GDP growth in Australia continued to muddle along in Q4, edging up from 0.4% q/q in Q3 to 0.5% q/q. In New Zealand, we think a stronger contribution from net trade was offset by a decline... 26th February 2020 · 10 mins read
