INFLATION (FINANCE) – AUSTRALIA

Challenge emerges to inflation target regime

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Original article by Vesna Poljak
The Australian Financial Review – Page: 27 : 22-Nov-18

The Bank of Canada has signalled that it will undertake a review of alternatives to its inflation target of two per cent. Options that the central bank will consider include increasing the inflation target, targeting aggregate prices or nominal income, and adding a full employment objective. The move may increase pressure on the Reserve Bank of Australia to reappraise its own inflation target of 2-3 per cent. Some economists have argued that the RBA’s inflation target is too high, although many advocate the status quo.

CORPORATES
BANK OF CANADA, RESERVE BANK OF AUSTRALIA, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY

Inflation Expectations up 0.2% to 4.5% in October

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Original article by Roy Morgan
Market Research Update – Page: Online : 19-Nov-18

Australians aged +14 expect inflation of 4.5% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for October 2018. This is up 0.2% on a month ago, but unchanged from October 2017. Inflation Expectations have now tracked in a narrow range between 4.3-4.5% for 16 straight months, since July 2017. Inflation Expectations remain well below the eight-year average of 5.0%. Analysis shows that Inflation Expectations for supporters of the two major political parties are down compared to a year ago, while Inflation Expectations for Greens supporters are unchanged. However, Inflation Expectations for supporters of Independents and Others have increased substantially over the last year. October Inflation Expectations are based on a nationwide face-to-face survey of 4,156 Australians aged 14+.

CORPORATES
ROY MORGAN LIMITED

RBA says it’s all systems go for booming economy

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Original article by David Uren
The Australian – Page: 1 & 2 : 7-Nov-18

The Reserve Bank of Australia is upbeat about the outlook for the domestic economy, forecasting growth of 3.5 per cent in 2018 and 2019. The central bank also expects the unemployment rate to fall to 4.75 per cent over the next two years, while inflation is forecast to rise above its target range in 2019 to an average of 2.25 per cent. Meanwhile, RBA governor Philip Lowe says growth in wages will be gradual. The RBA has again left interest rates on hold, and financial markets do not anticipate any change in monetary policy until 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Hope mounts for improvement in real wages index

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Original article by Vesna Poljak
The Australian Financial Review – Page: 7 : 2-Nov-18

Australia’s wage price index recorded growth of 2.1 per cent year-on-year in the June quarter. The latest wage price index data, to be released on 14 November, will attract close scrutiny after inflation rose by 0.4 per cent in the September quarter and 1.9 per in the year to September. David Bassanese of Betashares notes that the wage price index data for the September quarter will be affected by the 3.5 per cent increase in the minimum wage that took effect at the start of July.

CORPORATES
BETASHARES CAPITAL LIMITED, AUSTRALIA. FAIR WORK COMMISSION, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Stubbornly low inflation confounds RBA

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Original article by Michael Roddan
The Australian – Page: 2 : 1-Nov-18

Official data shows that Australia’s headline inflation rate fell to 1.9 per cent in the year to September, compared with 2.1 per cent in the year to June. The underlying inflation rate has fallen to 1.7 per cent. The CPI figures show that an increase in the cost of utilities, tobacco and petrol in the September quarter was offset by a 12 per cent decline in childcare costs following changes to federal subsidies. Despite the fact that inflation is now below the Reserve Bank’s target range of 2-3 per cent, most economists do not expect an increase in official interest rates until at least the end of 2019.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD

Inflation Expectations unchanged for a third straight month in September

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

Australians aged +14 expect inflation of 4.3% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for September 2018. This is unchanged for the third straight month, but down 0.1% from September 2017. Inflation Expectations have now tracked in a narrow range between 4.3-4.5% for 15 straight months. Inflation Expectations remain well below the eight-year average of 5.0%. Analysis by generation compared to a year ago shows that Inflation Expectations are down for Millennials, Generation Z and Pre-Boomers, unchanged for Baby Boomers and up significantly for Generation X. September Inflation Expectations are based on a nationwide face-to-face survey of 4,304 Australians aged 14+.

CORPORATES
ROY MORGAN LIMITED

Stoked US pushes rates up, $A down

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Original article by John Kehoe, Jacob Greber, Mark Ludlow
The Australian Financial Review – Page: 1 & 10 : 5-Oct-18

The Australian dollar fell to a 2.5 year low of $US0.7078 on 4 October, with analysts tipping it could soon fall to below $US0.70 on the back of rising US interest rates. A combination of higher oil prices and a falling Australian dollar could push petrol prices up above $2 per litre, although a weaker dollar could help to make Australian exports more competitive and lead to reduced demand for more expensive imports. Fitch Solutions Macro Research suggested a rise in oil prices could trigger inflation, which could force the Reserve Bank to lift interest rates sooner than expected.

CORPORATES
FITCH AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, GRANT SAMUEL AND ASSOCIATES PTY LTD, OUTLOOK ECONOMICS, HSBC AUSTRALIA HOLDINGS PTY LTD

Inflation Expectations for employed Australians lower than a year ago

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Original article by Roy Morgan
Market Research Update – Page: Online : 24-Aug-18

Australians aged +14 expect inflation of 4.3% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for August 2018. This is unchanged on a month ago, but down 0.2% from August 2017. Inflation Expectations have now tracked in a narrow range between 4.3-4.5% for 14 straight months. Inflation Expectations remain well below the eight-year average of 5.0%. Analysis by employment status shows that Inflation Expectations for employed Australians dropped to 3.9% in August 2018, down 0.4% on a year ago. In comparison, Australians who are not employed – including retirees, students, those on home duties, those choosing to not work and the unemployed – increased by 0.1% to 4.9%. August Inflation Expectations are based on a nationwide face-to-face survey of 4,385 Australians aged 14+.

CORPORATES
ROY MORGAN LIMITED

Wage rises outpacing living costs

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Original article by David Uren
The Australian – Page: 1 & 2 : 18-Sep-18

Labour market economist Mark Wooden says that Australia has recorded 31 per cent growth in wages over the last decade, while inflation has increased by just 22 per cent over this period. The director of the Household, Income and Labour Dynamics Australia survey notes that the cost of living has not increased significantly in the last year, with big rises in the cost of petrol and electricity being offset by lower prices for some consumer goods. Professor Wooden adds that the HILDA data shows that income inequality has eased slightly in recent years. The HILDA survey is conducted by the University of Melbourne with interviewing conducted by Roy Morgan.

CORPORATES
UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, ROY MORGAN LIMITED

Inflation Expectations of Home Owners lower than a year ago

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Original article by Roy Morgan
Market Research Update – Page: Online : 20-Aug-18

Australians aged +14 expect inflation of 4.3% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for July 2018. This is down 0.2% from a month ago, and unchanged from July 2017. Inflation Expectations have now tracked in a narrow range between 4.3-4.5% for 13 straight months. Inflation Expectations remain well below the eight-year average of 5.0%. Analysis shows that Inflation Expectations for home owners in the three months to July 2018 dropped to 3.8%, down 0.1% on the same period a year ago, while Australians who are paying off their home had Inflation Expectations of 4.1% in the three months to July, up 0.1% on a year ago although still below the national average. Inflation Expectations for renter were at 5% for the three months to July, up by 0.2% from a year ago. July Inflation Expectations are based on a nationwide face-to-face survey of 5,288 Australians aged 14+.

CORPORATES
ROY MORGAN LIMITED