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2.Economic forecasts

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15 Feb 2019 (AFR) – Goldman Sachs downgrades outlook, pushes out RBA hike

(15 February 2019, AFR, p3, by Matthew Cranston and Natasha Gillezeau) ‘Goldman Sachs has downgraded its economic growth forecast and pushed out when it expects the Reserve Bank might hike interest rates because of weakening business surveys, falling house prices and global growth jitters. Goldman Sachs chief economist Andrew Boak said the outlook for the … Continue reading

13 Feb 2019 (AFR) – China says consumption growth likely to slow further this year

(13 February 2019, AFR, p13, by Yawen Chen, Stella Qiu and Ryan Woo) ‘Beijing | Consumption growth in China is “very likely” to slow further this year as the economy cools, the commerce ministry said on Tuesday, underlining the rising risks facing the Asian giant as it navigates a trade war with the United States.‘ … Continue reading

13 Feb 2019 (AFR) – Retail drags business conditions to barely recover from December lows: NAB

(13 February 2019, AFR, p9, by Matthew Cranston) ‘Interest rates will remain on hold until 2020, according to NAB, after the bank’s latest survey showed business conditions barely rebounded in January after December saw the biggest monthly fall since the global financial crisis. Business conditions rose 4 points to 7 index points in January, but … Continue reading

12 Feb 2019 (AFR) – Weak consumer sentiment slams developer – AVJennings profit plunges 90pc as settlements stall

(12 February 2019, AFR, p36, by Larry Schlesinger) ‘AVJennings managing director Peter Summers says “consumer confidence” rather than market fundamentals is to blame for the company posting its worst half-year results in six years. Mr Summers, who celebrated 10 years at the helm of the 87-year-old Australian developer this month, described the market for land, … Continue reading

12 Feb 2019 (AFR) – China’s holiday spending growth slows, underlining tough start to 2019

(12 February 2019, AFR, p14, by Xiaoqing Pi) ‘Beijing | The downward pressure on China’s consumption persisted over the Lunar New Year holiday, the annual festival when people travel, shop, and give gifts or money. People in China spent 1.01 trillion yuan ($210 billion) at restaurants, shopping malls and online outlets over the the week-long … Continue reading

11 Feb 2019 (AFR) – The shift in global economic mood that caused central bankers to blink

(11 February 2019, AFR, p19, by Sam Fleming and Jamie Smyth) ‘As Donald Trump rhapsodised last week about the “unprecedented economic boom” he is seeing across America, central bankers in Australia, India and the UK were preparing to join a broader retreat from plans to tighten monetary policy. Hours after the US President finished his … Continue reading

7 Feb 2019 (AFR) – Economists leaning towards rate cut and housing market pick-up – RBA governor Philip Lowe expects ‘further price declines in Sydney’

(7 February 2019, AFR, p8, by Ingrid Fuary-Wagner) ‘A shift in the RBA’s position on the economy that could lead to interest rates being cut rather than raised is likely to invigorate the housing market, experts say. The fall in property prices has accelerated over the past six months, and national values are 6.1 per … Continue reading

7 Feb 2019 (AFR) – RBA’s ‘neutral’ stance wipes out big four hike calls for 2019

(7 February 2019, AFR, p8, by Sarah Turner and Vesna Poljak) ‘The Reserve Bank of Australia’s move to a neutral stance in a slowing economy and softening housing market has wiped out interest rate hike expectations from the big four banks for 2019. RBA governor Philip Lowe used the opportunity of his first public speech … Continue reading

7 Feb 2019 (AFR) – RBA shifts to neutral guidance, Philip Lowe says rates outlook is more balanced

(7 February 2019, AFR, p1, by Vesna Poljak and John Kehoe) ‘Leading market economists have backed away from predicting higher interest rates in 2019 after Reserve Bank governor Philip Lowe retreated from his monetary policy guidance that the next move in interest rates would likely be up. Dr Lowe’s new message that the chances of … Continue reading

6 Feb 2019 (TheAge) – Economy shows worrying signs for government ahead of election

(6 February 2019, The Age, p4, by Shane Wright) ‘Scott Morrison could head into a federal election with the economy at its weakest in years with signs growing consumers are reacting to tumbling house prices and stagnant wages by shutting their wallets. As the Reserve Bank sliced its forecast for economic growth and signalled concern … Continue reading

5 Feb 2019 (AFR) – Argo Investments predicts volatile 2019 for ASX investors

(5 February 2019, AFR, p15, by Simon Evans) ‘The managing director of the $7 billion Argo Investments says 2019 is likely to be as volatile as last year because there are so many local uncertainties still to be resolved including the severity of the housing downturn, the Hayne royal commission fallout and the federal election. … Continue reading

30 Jan 2019 (AFR) – China’s New Year migration soured by slowing economy and crackdown on behaviour

(30 January 2019, AFR, p36, by Michael Smith) ‘Shanghai | The world’s biggest annual mass migration is under way this week as hundreds of millions of people in China pack into buses, trains and planes to return to their families for the Lunar New Year holidays. But the mass exodus of workers from major cities … Continue reading

30 Jan 2019 (AFR) – Bleak earnings season ahead, Confession season crunches earnings forecasts: Morgan Stanley

(30 January 2019, AFR, p29, by Vesna Poljak) ‘Morgan Stanley strategists warn that the coming earnings season will be a disappointing one given the quality of economic data and the relentlessly negative trading updates seen since Christmas. Estimates for earnings-per-share growth across the S&P/ASX 200 Index have been reduced to 4.2 per cent for 2018-19, … Continue reading

25 Jan 2019 (AFR) – Number of houses and units built across Australia forecast to drop by 25 per cent

(25 January 2019, AFR, p34, by Ingrid Fuary-Wagner) ‘The number of new homes built across Australia is expected to drop dramatically by 25 per cent from when construction peaked three years ago to fiscal 2023. A record number of homes were built during the height of the boom over the 2015-2016 financial year and while … Continue reading

23 Jan 2019 (AFR) – Downbeat IMF underlines commodity risks

(23 January 2019, AFR, p29, by Sarah Turner) ‘The International Monetary Fund’s second downgrade to the global growth outlook in three months has underlined the risks facing Australia’s commodity exports to China. The IMF lowered its global growth forecast for 2019 to 3.5 per cent from a previous projection of 3.7 per cent to reflect … Continue reading

23 Jan 2019 (AFR) – Ken Rogoff warns China slowdown could be its ‘Minsky moment’

(23 January 2019, AFR, p10, by Ambrose Evans-Pritchard) ‘Davos, Switzerland | China is in the grip of a dangerous downturn and may be forced to rescue large parts of its financial and economic system, the world’s leading expert on debt crises has warned. Harvard professor Kenneth Rogoff said the key policy instruments of the Communist … Continue reading

23 Jan 2019 (TheAge) – The global economic slowdown is accelerating – and Australia is vulnerable

(23 January 2019, The Age, Business, p26, by Stephen Bartholomeusz) ‘The global economy is slowing and the most recent data points say the rate of decline is accelerating. That signals that any renewal of the trade confrontation between the US and China once their truce ends at the start of March could exacerbate what are … Continue reading

22 Jan 2019 (AFR) – China’s economy slows to weakest rate since 2009

(22 January 2019, AFR, p11, by Michael Smith) ‘Shanghai | China says the world’s second-largest economy faces further downward pressure this year after reporting the lowest rate of quarterly growth since the global financial crisis as expected following the introduction of US trade tariffs and a slowdown in domestic consumption and investment. China’s gross domestic … Continue reading

22 Jan 2019 (AFR) – Consumption sector at risk of being hit by a ‘double whammy’

(22 January 2019, AFR, p5, by Tim Boyd) ‘The consumption sector of the Australian economy is at risk of being hit by a “double whammy” in 2019 if a negative wealth effect from the property downturn is coupled with a slowdown in employment growth, economists said. ‘ Read more at AFR.com (might need AFR login … Continue reading

22 Jan 2019 (AFR) – China the swing factor for RBA interest rate cut

(22 January 2019, AFR, p2, by Sarah Turner) ‘Economic data from China could be the swing factor that sends the Reserve Bank of Australia into rate-cut mode, some economists say. On Monday, data showed that the world’s second-largest economy slowed slightly in the fourth quarter of 2018, posting growth of 6.4 per cent compared to … Continue reading

22 Jan 2019 (AFR) – IMF, Josh Frydenberg warn of global economic slowdown

(22 January 2019, AFR, p1, by John Kehoe) ‘Treasurer Josh Frydenberg has warned the economy is confronting global “storm clouds” this election year, as he pressed the case for the Coalition’s belief in the “invisible hand of capitalism” being a better economic management style than Labor’s “dead hand of socialism”. Coinciding with the International Monetary … Continue reading

21 Jan 2019 (AFR) – Rate cut now a 50-50 call for RBA’s December meeting

(21 January 2019, AFR, p25, by Vesna Poljak) ‘The Reserve Bank of Australia’s ability to raise interest rates has become almost an impossible task in the eyes of the futures market, which now sees the prospect of an interest rate cut at the last meeting of 2019 as a 50-50 scenario. A plunge in consumer … Continue reading

21 Jan 2019 (AFR) – Mining to ‘drive wage growth’ in 2019

(21 January 2019, AFR, p8, by David Marin-Guzman) ‘The resources industry is expected to be one of the unlikely drivers of wages growth in 2019, with recruiters forecasting some salaries to climb by almost a third. Recruitment firm Robert Walters predicted “acute skill shortages” in the mining industry in West Australia and Queensland in its … Continue reading

19 Jan 2019 (AFR) – December house price drop the last straw on rates for Capital Economics

(19 January 2019, AFR, p20, by Sarah Turner) ‘December’s 1.3 per cent drop in house prices has proved the tipping point for Capital Economics, with the economics forecaster slashing its interest rate forecast as it braces for a deeper housing downturn. Marcel Thieliant, Capital Economics’ senior economist for Australia and New Zealand, said he made … Continue reading

17 Jan 2019 (AFR) – ‘Worst outlook’ for global economy since July 2008; Fund managers slash growth, earnings bets: BAML monthly survey

(17 January 2019, AFR, p26, by Timothy Moore) ‘Optimism for global growth and corporate earnings has crashed among global fund managers, according to Bank of America Merrill Lynch. A net 60 per cent of fund managers surveyed between January 4 and January 10 now think global growth will weaken over the next 12 months, which … Continue reading

10 Jan 2019 (AFR) – Markets are flashing warning signs of a corporate profit collapse

(10 January 2019, AFR, p26, by Lu Wang) ‘Everyone knows profit growth is poised to cool this year. But by how much? Analysts who try to answer that question by looking at signals embedded in the stock market are coming up with some worrisome numbers. Going by history, the 16 per cent decline in the … Continue reading

10 Jan 2019 (AFR) – Why the world economy feels so fragile despite relative stability

(10 January 2019, AFR, p25, by Martin Wolf) ‘Should we be concerned about the state of the world economy? Yes: it always makes sense to be concerned. That does not mean something is sure to go badly wrong in the near future. On the contrary, the world economy seems to be heading into just a … Continue reading

10 Jan 2019 (AFR) – Slowing economy puts budget surplus in doubt, Fitch Solutions warns

(10 January 2019, AFR, p3, by John Kehoe) ‘A slowdown in the world economy will soften anticipated federal revenues and may force the government to spend more to support Australia, stopping the Morrison government reaching its much-hyped return to a budget surplus next year, economists at Fitch Solutions have predicted. Fitch Solutions, a global macroeconomic … Continue reading

9 Jan 2019 (AFR) – S&P 500 could still be 14.5pc overvalued: NAB

(9 January 2019, AFR, p27, by Timothy Moore) ‘The S&P 500 could still be as much as 14.5 per cent overvalued, and that could keep the Federal Reserve on the sidelines through the first half of 2019, according to NAB. NAB market strategist Tapas Strickland said the recent sell-off “has seen valuations come back more … Continue reading

9 Jan 2019 (AFR) – UBS economist Arend Kapteyn says global economy slowing more than feared

(9 January 2019, AFR, p19, by Jonathan Shapiro) ‘UBS economist Arend Kapteyn says the global economy has slowed by more than he initially feared as recent data dispells hope that growth has stabilised. “The glimmer of stabalisation we saw in December was a head-fake,” the economist told clients in Shanghai for the UBS Greater China … Continue reading

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