Australia & New Zealand Economics Update House prices will fall further despite supply response The recent slump in building approvals suggests that the supply overhang in the housing market may disappear next year. But we still think that the current downturn will prove to be the longest and... 7th November 2018 · 1 min read
Australia & New Zealand Economics Update RBA's optimism unlikely to materialise The upward revision to the RBA’s growth and inflation forecasts suggest that the Bank is moving closer to tightening policy. But we still think that the downturn in the housing market will result in... 6th November 2018 · 1 min read
Australia & New Zealand Economics Weekly Inflation trouble The slowdown in underlying inflation in the third quarter didn’t come as a shock to the RBA. But the bigger picture is that market forces are still keeping inflation subdued. And with early signs that... 2nd November 2018 · 1 min read
Australia & New Zealand Data Response Retail Sales (Sep./Q3) The subdued rise in real retail sales in the third quarter means that consumer spending growth probably slowed. While falling petrol prices should provide some relief to households soon, we think that... 2nd 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 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
