INFLATION (FINANCE) – AUSTRALIA

Odds of Melbourne Cup Day rate rise shorten

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Original article by Shane Wright, Rachel Clun
The Age – Page: Online : 18-Oct-23

The minutes of the Reserve Bank of Australia’s board meeting for October show that it considered increasing the cash rate. The minutes stated that the RBA board has a low tolerance for a slower return of inflation to the target range than currently expected, and that upcoming economic data will determine whether the current monetary pause is sustained. Inflation and unemployment data to be released next week are likely to be a key factor as to whether the cash rate is increased in November. Meanwhile, Deloitte Access Economics has forecast that economic growth will slow to one per cent by the March 2024 quarter, and that the nation will experience both a per capita recession and a recession in the retail sector.

CORPORATES
RESERVE BANK OF AUSTRALIA, DELOITTE ACCESS ECONOMICS PTY LTD

Inflation Expectations dropped to 5.4% for the month of August – and have now fallen to 4.9% in mid-September

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Original article by Roy Morgan
Market Research Update – Page: Online : 20-Sep-23

In August 2023, Australians expected inflation of 5.4% annually over the next two years, down 0.2% points from July. This is also down 0.2% points from a year ago in August 2022 (5.6%) and in line with the monthly average so far this year of 5.4%. The latest weekly Inflation Expectations are now at 4.9% in mid-September – the lowest weekly Inflation Expectations for 18 months since early February 2022, before Russia invaded Ukraine. The softening in Inflation Expectations in recent weeks suggest that the RBA’s decision to leave interest rates unchanged at its last three board meetings may be the correct decision, but there are still significant pressures in the economy. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade and includes interviews with 5,982 Australians aged 14+ in August.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Nation stuck on grow slow: OECD

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Original article by Tom Dusevic
The Australian – Page: 1 & 4 : 20-Sep-23

The OECD still expects Australia to record GDP growth of 1.8 per cent in 2023, in line with its previous forecast. However, GDP growth is expected to be just 1.3 per cent in 2024. The OECD has also forecast that Australia’s headline inflation rate will fall to 3.2 per cent in 2024, down from 5.5 per cent in 2023. However, the Reserve Bank of Australia’s preferred measure of core inflation is forecast to rise to 5.9 per cent in 2023 before falling to 3.3 per cent next year. Meanwhile, the minutes from the RBA’s monthly board meeting shows that board members considered lifting the cash rate to 4.35 per cent in September, due to concerns about inflation

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA

July monthly Inflation Expectations were unchanged at 5.6% – but have now dropped to 5.2% in mid-August

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Original article by Roy Morgan
Market Research Update – Page: Online : 16-Aug-23

In July 2023, Australians expected inflation of 5.6% annually over the next two years, unchanged from June. This also matches the Inflation Expectations of four months ago in March 2023, but is down 0.3% points from a year ago in July 2022 (5.9%). Although Inflation Expectations have been stable over the last few months they have fallen during the early weeks of August. The latest weekly Inflation Expectations are now at 5.2% in mid-August, down for two consecutive weeks since late July – the first consecutive weekly drops in the measure since late April. The softening in Inflation Expectations in recent weeks suggest that the Reserve Bank’s decision to leave interest rates unchanged in July and August may be the correct decision; however, there are still significant pressures in the economy. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade and includes interviews with 5,968 Australians aged 14+ in July.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Lowe: we are on way to taming inflation

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Original article by Patrick Commins
The Australian – Page: 1 & 4 : 2-Aug-23

Treasurer Jim Chalmers says the Reserve Bank of Australia’s decision to leave the cash rate unchanged at 4.1 per cent on Tuesday will be a "welcome reprieve" for people who are "doing it tough". He adds that while inflation is falling, it is still too high. RBA governor Philip Lowe has also acknowledged that consumer price growth remains too high, but says the recent data is consistent with inflation returning to the target range of 2-3 per cent over time. Lowe adds that a second successive pause will give the RBA more time to assess the impact of the rate rises to date, as well as the economic outlook.

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

Rate hikes may cost even more jobs: RBA

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Original article by Patrick Commins
The Australian – Page: 2 : 19-Jul-23

The minutes of the Reserve Bank of Australia’s board meeting for July show that it considered a 25 basis point increase in the cash rate. The board also discussed the possibility that growing pressure on households’ budgets could result in consumption slowing more sharply than the current forecasts suggest. This would in turn result in slower demand for labour, while the unemployment rate would most likely rise beyond the rate required to ensure that inflation returns to the target range of 2-3 in a timely manner. National Australia Bank’s senior economist Adam Boynton expects interest rates to remain on hold, although he says a rate rise in August is still a possibility.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Chalmers won’t back the unions on jobless target

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Original article by Greg Brown
The Australian – Page: 4 : 17-Jul-23

Treasurer Jim Chalmers says he will not ‘pre-empt’ the monetary policy decisions that incoming Reserve Bank of Australia governor Michele Bullock might recommend to its board. Chalmers adds that it "remains to be seen" as to whether inflation can be brought under control with higher levels of employment, and he says inflation is the main challenge facing the domestic economy. The ACTU has called for a "reset" of the RBA’s full employment target in the wake of Bullock’s appointment, while Australian Workers Union secretary Paul Farrow said the RBA should redefine full employment as being "understood as zero involuntary unemployment". Bullock had suggested in June that the unemployment rate will have to rise to 4.5 per cent to restore inflation to the target range of 2-3 per cent.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, ACTU, AUSTRALIAN WORKERS’ UNION-FEDERATION OF INDUSTRIAL, MANUFACTURING AND ENGINEERING EMPLOYEES

Inflation Expectations down 0.4% points to 5.5% in mid-July after rising significantly in June and early July

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Original article by Roy Morgan
Market Research Update – Page: Online : 12-Jul-23

The latest ANZ-Roy Morgan Inflation Expectations are down 0.4% points to 5.5% in mid-July after increasing steadily during June. This week Australians expected inflation of 5.5% annually over the next two years. Despite the weekly fall, the measure has averaged 5.7% so far in July after increasing significantly from a weekly low of 5.1% in mid-May. The monthly figure for June showed Inflation Expectations of 5.6%, an increase of 0.4% points from May, and the equal highest monthly figure so far this year after dipping to its lowest in over a year in May. Roy Morgan’s Inflation Expectations during 2023 have consistently been followed weeks later by the ABS CPI figures. The monthly ABS CPI figures dropped to 5.6% in May 2023 – down 1.2% points from April (6.8% annual CPI). If the trend continues, we can expect to see the ABS CPI annual figures for June register an increase after dipping in May. The ABS CPI figures for June are due to be released on 26 July. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade and includes interviews with 5,966 Australians aged 14+ in June.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Inflation Expectations increased to 5.9% this week – far higher than May average of 5.2%

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Jun-23

In the last week Roy Morgan’s weekly Inflation Expectations is up 0.4% to 5.9% – far higher than the May average of 5.2%. Australians expect inflation of 5.9% annually over the next two years. The monthly Inflation Expectations figure for May of 5.2% was down 0.1% from April, and could be an indicator for today’s ABS May CPI figure. The monthly Inflation Expectations figure for May was the lowest monthly reading since February 2022. However, the latest figures show that the back-to-back decreases in monthly Inflation Expectations in April and May have not been sustained, with weekly Inflation Expectations rising throughout June and now at 5.9%. Looking longer-term, Inflation Expectations have averaged 5.4% so far during 2023 and are down from a monthly high of 6.5% in November 2022 and down significantly from a weekly high of 6.8% in early November. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade and includes interviews with 5,943 Australians aged 14+ in May.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

‘Unemployment is too low’: RBA deputy stirs up union anger

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Original article by Patrick Commins, Ewin Hannan
The Australian – Page: 1 & 4 : 21-Jun-23

The Reserve Bank of Australia’s deputy governor Michele Bullock says the nation’s unemployment rate will need to rise to 4.5 per cent over the next year if inflation is to be progressively restored to the target range of 2-3 per cent. Bullock adds that failure to bring inflation under control would most likely result in a "deep and long-lasting recession". Her comments have been criticised by union leaders, with CFMEU national secretary Zach Smith saying it is shameful for a top central banker to state that unemployment needs to rise. He contends that tens of thousands of livelihoods would be at risk from such an "irresponsible economic approach", and adds that corporate profits are the main driver of the high inflation rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION OF AUSTRALIA