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2.Economic forecasts

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20 June 2018 (TheAge) – Sydney, Melbourne house prices tipped to fall 10 per cent

(20 June 2018, The Age, p12, Melanie Beeby) ‘ANZ Banking Group is tipping falls in Sydney and Melbourne housing prices of about 10 per cent from peak to trough, driven by tighter credit and higher interest rates next year. ANZ senior economists Daniel Gradwell and Joanne Masters said the housing market had slowed further than … Continue reading

15 June 2018 (AFR) – US bond yields indicate recession as interest rates rise

(15 June 2018, AFR, p31, by William McInnes) ‘A US recession could occur within the next two years according to former US bond trader Charlie Jamieson, who says the flattening of the bond yield curve is a signpost of possible trouble ahead. Speaking on a panel on global macro at Livewire Live 2018, Mr Jamieson, … Continue reading

8 June 2018 (AFR) – Narrower trade surplus sustains optimism around growth

(8 June 2018, AFR, p29, by Vesna Poljak) ‘The robust health of the external sector has been underscored by a 16th trade surplus in 18 months, picking up where better-than-expected first-quarter growth left off. Australia’s economy recorded a $977 million surplus in April, close to the $1 billion result the market was looking for. The trade report … Continue reading

8 June 2018 (AFR) – Surge in borrowing a sign of business confidence – RBA bond market analysis shows how non-mining investment is picking up the slack

(8 June 2018, AFR, p7, by Jacob Greber) ‘Non-resources companies are raising more money from bond markets than at any time since the turn of the century, a strong signal the investment surge that boosted this week’s national accounts is set to continue, Reserve Bank of Australia analysis shows. In a sign of growing confidence … Continue reading

4 June 2018 (AFR) – US jobs record points to Federal Reserve interest rate rise this month

(4 June 2018, AFR, p11, by John Kehoe) ‘US unemployment has fallen to a historic low of just 3.8 per cent, fuelling a stock rally on Wall Street and virtually guaranteeing the Federal Reserve will increase interest rates next week. Economists are trying to figure out how long the stellar US employment run can continue … Continue reading

1 June 2018 (AFR) – China’s increase in private debt a financial stability risk: OECD

(1 June 2018, AFR, p37, by Michael Smith) ‘China’s rapid increase in private debt and a pick up in borrowing by property developers as real estate prices soar pose a risk to financial stability, the OECD’s latest world economic outlook says. At the same time, shadowing banking activity in the world’s second-largest economy is increasingly being reined in. In its latest outlook, the … Continue reading

31 May 2018 (AFR,Bloomberg) – Soros Sees New Global Financial Crisis Brewing, EU Under Threat

(31 May 2018, AFR, p12, by: Nikos Chrysoloras and Helene Fouquet) ‘A surging dollar and a capital flight from emerging markets may lead to another “major” financial crisis, investor George Soros said, warning the European Union that it’s facing an imminent existential threat. The “termination” of the nuclear deal with Iran and the “destruction” of the … Continue reading

31 May 2018 (AFR) – Household debt the top Australian risk: OECD

(31 May 2018, AFR, p3, by Jacob Greber) ‘The faltering property market and heavy household debt are the biggest risks to the nation’s rebounding economy, which is benefiting from a global growth spurt fuelled by US tax cuts and fiscal stimulus, says the OECD. In its latest outlook the Organisation for Economic Co-operation and Development … Continue reading

30 May 2018 (TheAge) – Economists warn against complacency – ‘Forecasting is a sexy business’: the past and future are on the minds of the world’s leading economists

(30 May 2018, The Age, Business, p34, By David Goodman & Rafaela Lindeberg) ‘… warning that economists and officials may last year have gone “a little too overboard” in their belief in a synchronised global upswing. Former Reserve Bank of India Governor Raghuram Rajan called for tighter oversight over shadow banking, financial technology and emerging … Continue reading

22 May 2018 (TheAge) – NAB joins pack in pushing out timing of RBA rate hike

(22 May 2018, The Age, Business, p20, Sarah Turner) ‘National Australia Bank has pushed out its predicted timing for an interest rate hike as wage growth remains elusive, with the bank saying the relationship between wages and employment may need a rethink. The NAB economics team says an interest rate hike from the Reserve Bank … Continue reading

21 May 2018 (TheAge) – This fund manager says it’s OK if economy won’t ‘shoot the lights out’

(21 May 2018, The Age, Business, p23, Mathew Dunckley) ‘Australia’s relatively slow economic growth compared to other parts of the globe is not concerning given the nation’s stellar run of years without recession, according to the outgoing chairman of a fund manager. Argo Investments chairman Ian Martin announced his resignation as head of the listed … Continue reading

17 May 2018 (TheAge) – ‘Stuck in the mud’: Wages shows second-weakest rise in two decades

(17 May 2018, The Age, p8, Eryk Bagshaw) ‘Wage growth has fallen below market expectations after workers’ pay increased by just 2.1 per cent in the year to March, and recorded its second-weakest quarterly result in two decades. The figures mean the Turnbull government will now need a post-GFC wage surge to help guarantee the early … Continue reading

16 May 2018 (AFR) – Fitch rules out sharp economic downturn derailing property market

(16 May 2018, AFR, p32, by Duncan Hughes) ‘Australia’s property buyers are vulnerable to a sharp economic shock because of a recent blow-out in household debt caused by cheap money and rising property prices, analysis by Fitch Ratings reveals. But it does not expect a “sharp or subdued” correction in the housing market because economic … Continue reading

16 May 2018 (AFR) – RBA’s Guy Debelle sees parallels to 1960s debt-fuelled fiscal mistakes in US

(16 May 2018, AFR, p10, by: Jacob Greber, Sarah Turner) ‘The Reserve Bank of Australia has ramped up warnings that US President Donald Trump’s debt-funded fiscal stimulus may have parallels to the late 1960s era that presaged nearly two decades of rampant inflation and skyrocketing interest rates. Speaking as the three-month US Treasury yield surpassed … Continue reading

14 May 2018 (AFR) – Tassos Stassopoulos: The fund manager immersed in emerging market Millennials

[COMMENT: Now this is very interesting. An experienced funds manager being told by an ethnographer that his research methods are all wrong. This supports the views that many chartists and technical analysts have about the methods for selecting investment candidates in the financial markets – that the methods of the majority of professionals in the … Continue reading

10 May 2018 (AFR) – Federal budget 2018: Global risks, Trump trade war means AAA still not safe – AAA outlook remains negative: S&P

(10 May 2018, AFR, p6, by Jacob Greber) ‘Claims the Coalition’s income tax cuts will produce an economic boost have been met with scepticism by a former adviser to John Howard, as well as ratings agency S&P, which has warned the credit outlook remains on negative outlook “for now” because of growing global risks.’ Read more at … Continue reading

8 May 2018 (AFR) – Sydney and Melbourne house prices could fall as much as 4 per cent, says SQM

(8 May 2018, AFR, p29, by Su-Lin Tan) ‘The days of double digit growth in house prices for Sydney and Melbourne are over as the two big cities head for a house price tumble, new forecast from SQM Research confirms. Property research group SQM Research, led by Louis Christopher who has successfully forecast house prices, … Continue reading

26 Apr 2018 (AFR) – Soft inflation supports Australian rates remaining on hold until late 2019

(26 April 2018, AFR, p26, by William McInnes) ‘Further evidence of a soft inflationary environment supports the consensus view that the Reserve Bank of Australia will keep the cash rate on hold until late 2019, according to market economists. While the data revealed some surprisingly positive forces behind the core inflation figure, inflation remains below the RBA’s target band … Continue reading

19 Apr 2018 (AFR) – The global economic recovery is real but fragile

(19 April 2018, AFR, p25, Martin Wolf) ‘The world economy is enjoying a period of strong economic growth. It is not growing as quickly as it did between 2003 and 2007, but, in view of how that surge ended, we should be grateful for that mercy. Both growth in 2017 and the growth forecast by … Continue reading

19 Apr 2018 (AFR) – Non-CBD offices in Melbourne ‘considerably undervalued’: BIS Oxford Economics

(19 April 2018, AFR, p34, by Larry Schlesinger) ‘Office buildings outside of the Melbourne CBD are “considerably undervalued”, meaning property values are likely to rise strongly over the next five years, according to the latest Melbourne office market report from research house BIS Oxford Economics.’ Read more at AFR.com (might need AFR login access, or … Continue reading

17 Apr 2018 (AFR) – Even bonanza profits may not be enough for Wall Street

(17 April 2018, AFR, p27, by Patrick Commins) ‘As the US quarterly earnings season kicks off, American investors are set to enjoy the type of earnings growth that their Aussie counterparts can only dream of. Year-on-year earnings per share growth for top 500 US-listed companies is expected to come in at around 17 per cent … Continue reading

19 Apr 2018 (AFR) – Peak in equities still ahead, according to latest BAML fund manager survey

[COMMENT: Can you believe this? Would you believe this? Fund managers are forecasting the market – but then that is what they do all the time, and then they bet (other people’s) money on their educated guess. Some of us struggle with this. Some technical analysts would look at the chart of the S&P500, and … Continue reading

9 Apr 2018 (TheAge,SMH) – LNG to drive record $230b in energy exports

(9 April 2018, The Age, Business, p23, Cole Latimer) ‘Australia will reach a record $230 billion in energy exports this financial year driven by an LNG and oil boom. The March 2018 edition of the federal government’s Resources and Energy Quarterly forecasts a buoyant export market that will hit more than $230 billion this year and … Continue reading

3 Apr 2018 (AFR) – Global trade war would be worse than 2009 global recession: KPMG

(3 April 2018, AFR, p6, by Jacob Greber) ‘A global trade war would be worse than many imagine, tipping much of Europe, the UK and Canada into recession and costing as many as 285,000 Australian jobs in an economic shock likely to last longer than the global financial crisis. Even a modest barrage of retaliatory … Continue reading

20 Mar 2018 (AFR) – ‘Overvalued’ Sydney house prices to fall 4.2 per cent in 2018: Moody’s Analytics

(20 March 2018, AFR, p37, by Su-Lin Tan) ‘Sydney’s blue-chip eastern suburbs will lead Sydney’s house price falls in the next two years, a new house price forecast by Moody’s Analytics shows. Prices of detached houses in areas such as Woollahra, Paddington, Bondi and Double Bay – where auction clearance rates were consistently the highest … Continue reading

16 Mar 2018 (AFR) – Oxford Economics’ Adrian Cooper says the ‘Goldilocks’ trade is not dead

(16 March 2018, AFR, p39, by Patrick Commins) ‘The “Goldilocks” environment of low inflation and high growth will continue to buoy markets this year and into the next, Oxford Economics chief economist Adrian Cooper says. The world entered a rare sweet spot of synchronised growth last year and “that story continues”, Cooper says. “The second … Continue reading

14 Mar 2018 (AFR) – Best since GFC: OECD backs Treasury, RBA 3pc growth forecast for budget

(14 March 2018, AFR, p2, by Jacob Greber) ‘The Organisation for Economic Cooperation and Development has backed Treasury and Reserve Bank of Australia forecasts for a lift in economic growth, thanks to stronger commodity prices and rising jobs growth. As separate data showed Australian companies are enjoying the strongest business conditions in at least two … Continue reading

7 Mar 2018 (AFR) – Earnings season cuts through the sharemarket noise to reveal true value – puts focus on fundamentals

[COMMENT: Please note that I did not write the headline for this article, because I have a different view about the term “true value”. In my humble opinion, there is not one single number for the “true value” for any given company’s shares, because the many potential buyers of the stock,and the analysts and commentators, … Continue reading

6 Mar 2018 (TheAge,SMH) – Wool, wheat prices tipped to ‘bounce back’ after horror year

(6 March 2018, The Age, Business, p23, Darren Gray) ‘After a dry year that hit crop production and cut farm incomes in some key growing regions, prices for major Australian agricultural commodities of wool, wheat, cotton and dairy are tipped to rise next financial year and boost farm returns. The federal government’s chief agricultural economics … Continue reading

1 Mar 2018 (AFR) – All eyes on bond market as bulls and bears tussle – The events in March that could reveal if bond market rout has legs

(1 March 2018, AFR, p35, by Brian Chappatta) ‘It’s perhaps the biggest question for financial markets in 2018: how high will Treasury yields climb? The next month may just hold the answer. After the benchmark 10-year US note yield hit 2.9537 per cent on Feb. 21, a four-year high, it seemed inevitable that 3 per … Continue reading

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