2020 survey: no lift in wage growth, no lift in economic growth and no progress on unemployment in year of low expectations

Original article by Peter Martin
The Conversation – Page: Online : 29-Jan-20

A panel of 24 leading economists expects Australia’s economic growth to remain at or below two per cent in 2020. The average forecast is for growth of 1.9 per cent. The consensus of the economists is that the unemployment rate will remain above five per cent, while growth in wages will remain at around 2.2 per cent. The panel also expects the iron ore price to continue to fall, which will in turn see growth in Australians’ living standards slow to 2.4%. Meanwhile, there is general agreement among the economists that official interest rates will be cut just once in 2020 and the the Reserve Bank will not have to pursue quantitative easing.

CORPORATES
RESERVE BANK OF AUSTRALIA

QE coming next year: JPMorgan

Original article by David Rogers
The Australian – Page: 17 & 28 : 12-Nov-19

JPMorgan Australia’s chief economist Sally Auld expects the Reserve Bank to implement unconventional monetary policy measures in the December 2020 quarter. Auld still anticipates another official interest rate cut in February, but warns that this will be insufficient to stimulate the economy, prompting the central bank to reduce the cash rate to 0.25 per cent and commence a quantitative easing program in late 2020. However, Auld says quantitative easing is unlikely to be necessary if the federal government’s May 2020 Budget includes ‘meaningful’ fiscal stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

QE tipped as rate cuts lose impact

Original article by David Rogers
The Australian – Page: 17 & 28 : 22-Oct-19

A number of economists now say the Reserve Bank of Australia could implement unconventional monetary policy measures in 2020. They include Westpac’s chief economist Bill Evans, who warns that quantitative easing may be necessary if the cash rate fall below 0.5 per cent. Michael Knox of Morgans Financial, Su-Lin Ong of RBC Capital Markets and Marcel Thieliant of Capital Economics have also flagged the prospect of quantitative easing. Financial markets have fully priced in a rate cut to 0.5 per cent by May.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, MORGANS FINANCIAL LIMITED, RBC CAPITAL MARKETS, CAPITAL ECONOMICS LIMITED, GOLDMAN SACHS AUSTRALIA PTY LTD

RBA to cut twice more to 0.5pc, say economists

Original article by Sarah Turner
The Australian Financial Review – Page: 1 & 22 : 30-Sep-19

A quarterly survey of economists shows that there is general consensus that the Reserve Bank of Australia will reduce the cash rate to 0.5 per cent by mid-2020. Most of the respondents expect official interests to be cut by 25 basis points before the end of 2019, followed by another cut by June. However, Shane Oliver of AMP Capital and Alan Oster of National Australia Bank expect a cash of 0.5 per cent at the end of 2019. Futures markets have priced in a 76 per cent chance of a rate cut on 1 October, and fully priced in a rate cut in November.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Business cash flow tax would lift investment

Original article by John Kehoe
The Australian Financial Review – Page: 9 : 3-Sep-19

Economist Ross Garnaut has called on the federal government to adopt a business cash flow tax that would incorporate a full deduction for corporate expenditure. He says a full tax write-off for business expenditure provides a significant incentive for investment, and is in line with Treasurer Josh Frydenberg’s recent call for companies to boost productivity by increasing capital investment in preference to share buybacks and special dividends. Garnaut and former federal Labor minister Craig Emerson have undertaken economic modelling on a possible switch from the traditional profit-based company tax to a tax based on cash flow.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BHP GROUP LIMITED – ASX BHP

AMP Capital’s Oliver the economist of choice for media mentions

Original article by Eli Greenblat
The Australian – Page: Online : 6-May-19

AMP Capital chief economist Shane Oliver was mentioned more than 2,500 times in metropolitan newspapers and online news sites over the period from April 2018 to March 2019, according to media monitoring company Streem. Oliver, who is also AMP Capital’s chief strategist, received more than twice as many mentions as Craig James from Commsec (1041), while REA Group’s Nerida Consisbee was the third-most mentioned economist, with 959 mentions.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH SECURITIES LIMITED, REA GROUP LIMITED – ASX REA

Politicians silent on inflation target change

Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 30-Apr-19

The need for the Reserve Bank’s inflation target continues to attract scrutiny, given that inflation remains well below its target range of 2-3 per cent. Warren Hogan and David Bassanesse are among the economists who believe that the central bank should revise its inflation target, although Westpac’s Bill Evans argues that doing so would have an impact on inflation expectations. Treasurer Josh Frydenberg and shadow treasurer Chris Bowen have declined to comment on the prospect of government intervention regarding the inflation target after the federal election.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF TECHNOLOGY, SYDNEY, BETASHARES CAPITAL LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AMP CAPITAL INVESTORS LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

The votes are in: Macquarie joins calls for an early cut in interest rates

Original article by Perry Williams, David Rogers
The Australian – Page: 17 & 27 : 30-Apr-19

The chances of a reduction in the cash rate in May is around 50 per cent, according to financial market pricing. However, a growing number of economists expect the Reserve Bank of Australia to ease monetary policy in May. Macquarie Group is the latest to forecast a rate cut in May, and chief economist Ric Deverell says the RBA is unlikely to be unduly concerned about reducing the cash rate during an election campaign. Macquarie says the central bank might also reduce its GDP growth and inflation forecasts at the monthly board meeting.

CORPORATES
RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG, JP MORGAN AUSTRALIA LIMITED, ROYAL BANK OF CANADA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD, CAPITAL ECONOMICS LIMITED, CITIGROUP PTY LTD, TD SECURITIES, NOMURA AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

Economists see rates on hold this year

Original article by Sarah Turner, Vesna Poljak, William McInnes
The Australian Financial Review – Page: 14 & 21 : 1-Apr-19

The latest quarterly survey of economists shows that the general consensus is that the Reserve Bank of Australia will leave official interest rates unchanged at 1.5 per cent for the remainder of 2019. The previous quarterly survey had shown that respondents expected rates to rise to 1.75 by the end of 2019. Meanwhile, the median forecast for the unemployment rate is 5 per cent by mid-2019, compared with a median forecast of 5.20 per cent in the previous survey. Expectations for underlying inflation in mid-2019 have also been pegged back, from 2.10 per cent in the January survey to 1.80 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NOMURA AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, CITIGROUP PTY LTD, LAMINAR CAPITAL PTY LTD, DEUTSCHE BANK AG, JP MORGAN AUSTRALIA LIMITED

Tax cuts key as economy struggles

Original article by Adam Creighton, David Uren
The Australian – Page: 4 : 13-Mar-19

The Commonwealth Bank’s chief economist Michael Blythe says the federal government should use its April 2019 Budget to announce more aggressive tax cuts than previously flagged. His view is backed by AMP’s Shane Oliver, who has called for tax cuts worth $6bn for people on low and middle incomes. Blythe has also disputed claims of a ‘per capita’ recession, arguing that key economic indicators suggest otherwise. He adds that despite lower GDP growth in 2018, real net national disposable income per capita increased by 2.1 per cent.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA