ECONOMIC INDICATORS – AUSTRALIA

New housing approvals jump 7.6pc in September

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Original article by Michael Bleby, Matthew Cranston
The Australian Financial Review – Page: 7 : 1-Nov-19

Official data shows that residential building approvals rebounded in September, with overall growth of 7.6 per cent in seasonally adjusted terms. Approvals for detached dwellings increased by 2.6 per cent, and approvals apartments and townhouses rose 16 per cent. Meanwhile, dwelling approvals totalled 176,638 in the year to September, compared with 179,924 in the year to August. Separate data from the Reserve Bank shows that there was an 0.2 per cent increase in housing credit in September, and annual growth of 3.1 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BIS OXFORD ECONOMICS PTY LTD

CPI cools further rate cut chances

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Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 31-Oct-19

Official data shows that the consumer price index rose 0.5 per cent during the September quarter and 1.7 per cent year-on-year. Trimmed mean inflation was 0.4 per cent during the quarter and 1.6 per cent for the year to September. With the inflation rate remaining below the Reserve Bank’s target range of 2-3 per cent for a 15th consecutive quarter, the cash rate now seems likely to stay unchanged at 0.75 per cent for the rest of the year. Craig James of CommSec says the three interest rate cuts in 2019 have spooked consumers.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH SECURITIES LIMITED, CITIGROUP PTY LTD, ERNST AND YOUNG, BIS OXFORD ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY

ANZ-Roy Morgan Consumer Confidence slips to 110.4

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Original article by Roy Morgan
Market Research Update – Page: Online : 30-Oct-19

ANZ-Roy Morgan Australian Consumer Confidence fell 1.1% to 110.4 in the week ended 27 October. Households’ views towards current financial conditions rose 5%, reversing much of the recent falls; views towards future financial conditions gained 0.4%, a third weekly rise. Consumers’ views toward current economic conditions fell 4% to the lowest level since early 2017, and views towards future economic conditions lost 3.8%. The ‘time to buy a major household item’ was down 3.3%, compared to a gain of 5.1% previously. The four-week average for inflation expectations was stable at 4.1%, although the weekly reading fell below 4% after five weeks of stability.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ-Roy Morgan Consumer Confidence recovering to 111.6

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Oct-19

ANZ-Roy Morgan Australian Consumer Confidence rose 0.6% to 111.6 in the week ended 20 October, after the previous week’s 1.2% drop. Households’ views towards current financial conditions fell 2.4%, and this component is now down nearly 10% from its August high; views towards future financial conditions gained 0.4%, taking this subindex back above its long-term average. Consumers’ views toward current economic conditions gained 0.3%, and views towards future economic conditions declined by 1.1%; both subindices are below their long-term average. The ‘time to buy a major household item’ gained 5.1%, and inflation expectations remained stable at 4.1%.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Rate cuts to go on despite jobless drop

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Original article by Michael Roddan
The Australian Financial Review – Page: 2 : 18-Oct-19

Official data shows that Australia’s unemployment rate fell from 5.3 per cent to 5.2 per cent in September, after the participation rate eased to 66.1 per cent. The economy added 14,700 jobs during the month, with a 26,200-strong increase in full-time jobs being offset by the loss of 11,400 part-time positions. Westpac economist Simon Murray expects the small fall in the jobless rate to be temporary, adding that it will give the Reserve Bank more time to assess the state of the economy before taking any further action on interest rates. The official underemployment rate is currently 8.3 per cent.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS

Building slump to hit whole economy

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Original article by Michael Roddan, Elias Visontay
The Australian – Page: 1 & 2 : 18-Oct-19

The Reserve Bank’s deputy governor Guy Debelle has told an industry conference in Sydney that a forecast slump in dwelling investment could reduce GDP growth by one per cent. The Master Builders Association’s chief economist Shane Garrett has called on the federal government to take steps to bring about an end to the current housing downturn as soon as possible, while ­Opposition Leader Anthony Albanese says Prime Minister Scott Morrison has no plans for stimulating the economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, MASTER BUILDERS’ ASSOCIATION, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

ANZ-Roy Morgan Consumer Confidence down to 110.9

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Original article by Roy Morgan
Market Research Update – Page: Online : 16-Oct-19

ANZ-Roy Morgan Australian Consumer Confidence fell 1.2% to 110.9 in the week ended 13 October, its second straight weekly loss; confidence remains below its long-run average. Households’ views towards current financial conditions gained 0.2%, while views towards future financial conditions were up 0.7%. However. consumers’ views toward current economic conditions fell 1% and views towards future economic conditions lost 1.7%. The ‘time to buy a major household item’ fell 3.9% after two successive gains. Inflation expectations remained stable at 4.1%.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Housing construction ticks up slightly in June

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Original article by Michael Bleby
The Australian Financial Review – Page: 26 : 10-Oct-19

New figures show that residential building starts increased by 1.1 per cent in the June quarter, following declines in the previous two quarters. A 10.6 per cent decline in detached-housing starts was offset by a 21 per cent increase in apartment starts. Meanwhile, housing starts for the year to June totalled 196,867; this was the first year-on-year fall since September 2014. Ernst & Young’s chief economist Joanne Masters expects a further decline in residential construction activity.

CORPORATES
ERNST AND YOUNG, HOUSING INDUSTRY ASSOCIATION LIMITED, COMMONWEALTH SECURITIES LIMITED, TAMAWOOD LIMITED – ASX TWD

Evans warns of negative impact of rate cuts

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Original article by David Rogers
The Australian – Page: 27 : 10-Oct-19

Financial markets expect the cash rate to fall to 0.5 per cent by February, and market pricing suggests that there is more than a 50 per cent chance of further rate cuts by mid-2020. Westpac’s chief economist Bill Evans says the Reserve Bank should take note of declining consumer confidence when considering further rate cuts, and the "possible unintended consequences" of any move toward negative interest rates. The general consensus of economists is that fiscal policy would be more effective than unconventional monetary policy measures such as quantitative easing.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ROY MORGAN LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, GOLDMAN SACHS AUSTRALIA PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP CAPITAL INVESTORS LIMITED

QE would kill finance and capitalism, McKibbin warns

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Original article by John Kehoe
The Australian Financial Review – Page: 6 : 9-Oct-19

Former Reserve Bank board member Warwick McKibbin has cautioned against any move to reduce implement quantitative easing in Australia. He argues that unconventional monetary policy in Europe is merely propping up financially unsustainable businesses while restricting access to capital for new businesses. He adds that reducing interest rates below a certain level merely distorts capital without providing any economic stimulus. Some economists expect the cash rate to fall to 0.5 per cent in coming months.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK FOR INTERNATIONAL SETTLEMENTS, AUSTRALIAN NATIONAL UNIVERSITY