Inflation sentiment defies Reserve Bank projections

Original article by Adam Creighton
The Australian – Page: 2 : 12-Jul-19

Roy Morgan’s monthly inflation expectations survey shows that consumers expect inflation of 3.8 per cent for each of the next two years. This compares with the official inflation rate of 1.3 per cent for the year to March, and the Reserve Bank’s inflation target of 2-3 per cent. Julian McCrann of Roy Morgan says the decline in the housing market has been a big driver of lower inflation expectations in 2019.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Inflation Expectations down to 3.8% in June as RBA cuts rates

Original article by Roy Morgan
Market Research Update – Page: Online : 11-Jul-19

Australians aged +14 expect inflation of 3.8% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for June 2019. This is down 0.3% on May and down 0.7% on June 2018. Inflation Expectations have decreased around Australia in June, and are down compared to a year ago, led by declines for both employed and unemployed Australians as well as across different occupations and employment categories. Analysis by voting intentions shows that Inflation Expectations for L-NP supporters fell 0.1% to 3.3% in June, while Inflation Expectations for ALP supporters dropped by 0.3% to 3.7%. Inflation Expectations for Greens supporters were unchanged at 3.6%. June Inflation Expectations are based on personally interviewing a nationwide representative sample of 3,984 Australians aged 14+ face-to -face in their own homes.

CORPORATES
ROY MORGAN LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Inflation Expectations rebound to 4.1% in May as L-NP re-elected

Original article by Roy Morgan
Market Research Update – Page: Online : 17-Jun-19

Australians aged +14 expect inflation of 4.1% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for May 2019. This is a significant rebound from the record low of 3.7% in April, and down 0.2% on May 2018. Despite the increase in May, Inflation Expectations have decreased around Australia compared to a year ago, although the decline has been concentrated in Capital Cities, with Inflation Expectations in Country Areas unchanged on a year ago. Analysis by voting intentions shows that Inflation Expectations for ALP supporters increased 0.2% to 4% in May, while Inflation Expectations for L-NP supporters were unchanged at 3.4%. Inflation Expectations for Greens supporters declined by 0.2%, to 3.6%. May Inflation Expectations are based on personally interviewing a nationwide sample of 4,011 Australians aged 14+ face-to -face in their own homes.

CORPORATES
ROY MORGAN LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Ex-RBA deputy queries rate cut

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 6-Jun-19

Stephen Grenville was the Reserve Bank of Australia’s deputy governor when it introduced inflation targeting in 1996. However, he has questioned whether the inflation target of 2-3 per cent is still necessary, as well as the central bank’s decision to reduce the cash rate to a record low of 1.25 per cent. Grenville argues that there needs to be more focus on the role of fiscal policy in stimulating the economy. Inflation has been below the RBA’s target range for several years, but governor Philip Lowe says there is no need for any changes to the monetary policy framework at present.

CORPORATES
RESERVE BANK OF AUSTRALIA, LOWY INSTITUTE FOR INTERNATIONAL POLICY, OUTLOOK ECONOMICS, AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND

Inflation Expectations dropped to a record low of 3.7% in April

Original article by Roy Morgan
Market Research Update – Page: Online : 27-May-19

Australians aged +14 expect inflation of 3.7% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for April 2019. This is down 0.3% on March and down 0.8% on April 2018, and a new record low for the indicator. Inflation Expectations have now dropped to 1.2% points below the nine-year average of 4.9%, the largest gap below average since late 2015. Analysis by voting intentions shows that Inflation Expectations for L-NP supporters have dropped to only 3.4%, down 0.7% from a year ago, while those of ALP supporters are now just above the national average at 3.8%, also down by 0.7%. The Inflation Expectations of Greens supporters are in comparison little changed from a year ago at 3.8%, down by only 0.2%. April Inflation Expectations are based on personally interviewing a nationwide sample of 4,154 Australians aged 14+ face-to-face in their own homes.

CORPORATES
ROY MORGAN LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Inflation target review makes sense: Don Brash

Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 10-May-19

The Reserve Bank of Australia should review its inflation target range of 2-3 per cent, according to former Reserve Bank of New Zealand governor Don Brash. He adds that the target band may need to be widened rather than reduced. Australia’s inflation rate remains well below the target band, but former RBA governor Bernie Fraser does not believe that a review is necessary. Brash headed the RBNZ when it introduced inflation targeting in 1990; its inflation target is currently 1-3 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, AUSTRALIA. DEPT OF THE TREASURY

RBA set to cut, Macquarie predicts

Original article by Sarah Turner
The Australian Financial Review – Page: 29 : 3-May-19

Inflation remains well below the Reserve Bank’s target range of 2-3 per cent, and Ric Deverell of Macquarie Group notes that it is continuing to trend lower. He says the inflation outlook is the key factor that will prompt the Reserve Bank to reduce official interest rates by 25 basis points on 7 May. Deverell adds that a rate cut will have more impact while the unemployment rate is low rather than if the central bank waits until it rises.

CORPORATES
RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG

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

Inflation Expectations stuck at lowest in over two years

Original article by Roy Morgan
Market Research Update – Page: Online : 29-Apr-19

Australians aged +14 expect inflation of 4% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for March 2019. This is unchanged on February but down 0.3% on March 2018, and the index remains at its lowest since late 2016 for a second straight month. Inflation Expectations remained significantly below the nine-year average of 4.9% in March. Analysis by voting intentions shows that Inflation Expectations for supporters of the major parties diverged further in March, with the index decreasing by 0.2% for L-NP supporters to only 3.4%. In contrast the Inflation Expectations of ALP supporters increased by 0.2% to 4.1%. Greens supporters now have the lowest Inflation Expectations of any group after another fall, down 0.5% to 3.3%. March Inflation Expectations are based on personally interviewing a nationwide sample of 4,069 Australians aged 14+ face-to -face in their own homes.

CORPORATES
ROY MORGAN LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Reserve Bank ready to cut rates

Original article by David Rogers
The Australian – Page: 19 & 26 : 17-Apr-19

The minutes of the Reserve Bank of Australia’s monthly board meeting indicate that the central bank still expects gradual progress in lifting the inflation rate to its target range and reducing the unemployment rate. However, the minutes show that the RBA would be prepared to reduce the cash rate if inflation remains low and unemployment increases. The Australian dollar fell to a two-week low of $US0.714 in local trading in response to the release of the RBA’s minutes.

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