INFLATION (FINANCE) – AUSTRALIA

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+.

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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+.

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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.

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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+.

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ROY MORGAN LIMITED

Ticehurst supports lowering RBA inflation target

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Original article by Vesna Poljak
The Australian Financial Review – Page: 31 : 17-Aug-18

Several leading economists have urged the Reserve Bank of Australia to scale back its inflation target. Andrew Ticehurst of Nomura Australia argues that the RBA’s midpoint of the 2-3 per cent target range is higher than that of its counterparts in the US, New Zealand and the UK, while he notes that some Asian central banks have reduced their inflation target without any adverse impact. Ticehurst says the RBA should "fine-tune" the inflation target by reducing it to around two per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY, BANK OF KOREA, BANK INDONESIA

RBA’s Lowe has his share of doubters

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 32 : 10-Aug-18

The Reserve Bank of Australia has not increased the official cash rate since November 2010, but governor Philip Lowe indicated on 8 August that it may not be long before it has to lift rates. An increase in interest rates would mean that the RBA felt that its inflation target of 2.5 per cent might be not be far off being reached, but some economists are not so certain about this, given the experience of economies in other parts of the world.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG

Inflation target here to stay, says Lowe

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Original article by Patrick Commins
The Australian Financial Review – Page: 5 : 9-Aug-18

The Reserve Bank of Australia remains committed to its long-term goal of returning the inflation rate to 2.5 per cent. Central bank governor Philip Lowe says the inflation target will not be reviewed. Lowe has also indicated that achieving the inflation target is not a prerequisite for increasing official interest rates. He added that the statement of monetary policy to be released on 10 August will show that the RBA does not expect the unemployment rate to fall to five per cent before the end of 2020.

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

Inflation keeps RBA’s hands tied

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Original article by Patrick Commins, Vesna Poljak
The Australian Financial Review – Page: 1 & 6 : 26-Jul-18

Alex Joiner of IFM Investors says the latest inflation data is "underwhelming". Official figures show that consumer price inflation rose by a below-forecast 0.4 per cent in the June quarter and by 2.1 per cent in the year to June. The underlying inflation rate fell below the lower end of the Reserve Bank’s target range of 2-3 per cent. Justin Smirk of Westpac notes that inflation data has now been below consensus forecasts for a record seventh successive quarter.

CORPORATES
IFM INVESTORS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Petrol prices to drive inflation higher

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Original article by Patrick Commins
The Australian Financial Review – Page: 3 : 25-Jul-18

The median forecast of economists polled by Bloomberg is for consumer price inflation of 0.5 per cent in the June quarter, compared with 0.4 per cent in the March quarter. Australia’s consumer price inflation is forecast to have risen to 2.2 per cent in the year to June, up from 1.9 per cent previously. A sharp rise in the price of petrol in the June quarter is tipped to have been a major contributor to the rise in the inflation rate. Economists do not expect the latest inflation data to have a material impact on the outlook for official interest rates.

CORPORATES
BLOOMBERG LP, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, SOCIETE GENERALE AUSTRALIA LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, JP MORGAN AUSTRALIA LIMITED