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2.Economic forecasts

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16 Aug 2019 (AFR) – ‘Self-fulfilling’ downturn ahead, but Australia insulated: RBA

(16 August 2019, AFR, p5, Matthew Cranston, Economics correspondent) ‘Reserve Bank of Australia deputy governor Guy Debelle has warned of a “self-fulfilling downturn” globally because of the uncertainty over the US and China trade and technology war, but expects Australia will be insulated due to Chinese fiscal stimulus. After the Dow Jones Industrial Average sank … Continue reading

16 Aug 2019 (AFR) – RBA resists bond market’s distress call

[COMMENT: Now isn’t this interesting? The whole world is hypothesising about the likelihood of a global recession, but our local reserve bank is talking down the prospects!] (16 August 2019, AFR, p1, Vesna Poljak, Patrick Commins, Jemima Whyte, James Eyers and David Marin-Guzman) ‘The distress call being transmitted by seismic moves in the global bond … Continue reading

16 Aug 2019 (TheAge) – The ‘doom loop’ that could bring on a global recession

[COMMENT: Now I have to somewhat agree to the premise of this article, that too much thinking about, and scaremongering about, a possible recession might just bring it on as a self-fulfilling prophecy. I never realised that the term ‘doom loop’ is in the economist’s lexicon.] (16 August 2019, The Age, Business, p20, By David … Continue reading

16 Aug 2019 (TheAge) – Markets signal Trump’s trade wars could lead to US recession

(16 August 2019, The Age, Business, p20, Stephen Bartholomeusz) ‘Perhaps the only surprise about the carnage in global financial markets overnight is that it hadn’t happened earlier. It has been evident for quite some time that the Trump trade wars were doing increasing damage to the more trade-exposed economies – China and Germany in particular … Continue reading

15 Aug 2019 (AFR) – Wages steady at 2.3pc despite June quarter lift

(15 August 2019, AFR, p4, Matthew Cranston, Economics correspondent) ‘Wage growth has remained unchanged at 2.3 per cent per year despite a better than expected June quarter reading, according to official figures. Wages grew 0.6 per cent in the June quarter, more than the 0.5 per cent gain that the Bloomberg consensus of economists expected.’ … Continue reading

14 Aug 2019 (AFR) – Singapore slashes 2019 GDP forecast as global risks expand

(14 August 2019, AFR, p12, John Geddie and Anshuman Daga) ‘Singapore | Singapore slashed its full-year economic growth forecast on Tuesday as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of recession in the city-state. The government cut its forecast range for gross domestic product … Continue reading

14 Aug 2019 (AFR) – Employment growth to weaken: NAB

(14 August 2019, AFR, p6, Matthew Cranston, Economics correspondent) ‘Don’t expect an improvement in the unemployment rate any time soon, with the latest NAB Business conditions and confidence survey forecasts suggesting there will be fewer new jobs created per month than there has been in recent months. The survey’s July employment index, which measures the … Continue reading

13 Aug 2019 (AFR) – Economists are terrible at predicting recessions

(13 August 02019, AFR, p30,  Patrick Commins, Columnist) ‘Experts correctly predicted only five of the 153 recessions recorded around the world between 1992 and 2014. Will they do any better this time around? “The record of failure to predict recessions is virtually unblemished,” wrote the IMF’s Prakash Loungani in 2001. That scathing assessment was based … Continue reading

10 Aug 2019 (AFR) – Trade war may be over – Stalemate could drive search-for-yield rally

[COMMENT: This article has a very interesting take on the current trade war that seems to be just a tit-for-tat exchange; but which could be a whole lot more.] (10 August 2019, AFR, p29,  Christopher Joye, Columnist) ‘While trade tensions have recently erupted, this may presage a permanent impasse that could unleash the mother of … Continue reading

10 Aug 2019 (AFR) – Low rates are the weeds of the equity market

(10 August 2019, AFR, p23, Vesna Poljak, Markets Editor) ‘The Australian cash rate is inching closer to the zero lower bound, the same sharemarket that hit a record high in July just had its worst week in nine months, and earnings season is off to a rocky start. On what might eventually be recalled as … Continue reading

6 Aug 2019 (AFR) – Trade war, RBA send yields to record

(6 August 2019, AFR, p26, William McInnes, Reporter) ‘Slowing economic growth, trade war concerns and a global central bank rate cut cycle have pushed Australian bond yields to record lows with no sign of easing in sight. On Monday, the Australian 10-year bond yield was sitting at 1.085 although it is likely to fall further after … Continue reading

5 Aug 2019 (AFR) – Wall Street stocks fall most since December, bonds gain

(5 August 2019, AFR, p21, Jonathan Shapiro) ‘Wall Street’s main sharemarket indices registered the largest weekly falls of the year while bond rates plunged the most in seven years, after a dramatic week of central bank disappointments, unexpected trade war tweets and solid jobs data. On Friday, July US non-farm payrolls showed a solid gain … Continue reading

3 Aug 2019 (AFR) – Bank of England says Brexit uncertainties ‘more entrenched’

(3 August 2019, AFR, p13, Pan Pylas) ‘London | The probability that Britain’s economy slips into recession early next year is rising even if the country manages to negotiate a smooth and orderly exit from the European Union in the weeks ahead, the Bank of England warned on Thursday (Friday AEST).’ Read more at … Continue reading

1 Aug 2019 (AFR) – Profoundly low interest rates are here to stay

(1 August 2019, AFR, p27,  Robin Harding) ‘Although interest rates touch almost every aspect of economic life, the developed world remains deep in denial about the consequences. Here are eight themes for investors and policymakers to ponder. This will be a discomforting, defining week for the global economy. That is not because the US Federal … Continue reading

1 Aug 2019 (AFR) – Credit growth shrinks for first time in two years

(1 August 2019, AFR, p9, Lucas Baird, Reporter) ‘Lending to business contracted for the first time in more than two years in June, Reserve Bank data shows, capping off a period of stalled growth. But economists remained optimistic the figure would turn around and blamed the 0.1 per cent decline on the fallout from the … Continue reading

27 July 2019 (AFR) – First flickers of FOMO as property market turns

(27 July 2019, AFR, p11, Nila Sweeney, Reporter) ‘Investors and first-home buyers are reporting the first flickers of FOMO as parts of the property market start to turn and buyers move to get in at the bottom. While average sale prices in Sydney and Melbourne have risen only modestly since sentiment began turning after the … Continue reading

24 July 2019 (AFR) – Global growth forecasts cut by IMF

(24 July 2019, AFR, p13, John Kehoe, Senior Writer) ‘Global economic growth forecasts have again been downgraded by the International Monetary Fund, which has warned that elevated trade and technology tensions between the United States and China are the biggest risk. The IMF’s latest world economic outlook update forecasts growth of 3.2 per cent in … Continue reading

24 July 2019 (TheAge) – ‘Sluggish and precarious’: IMF cuts global growth forecast

(24 July 2019, The Age, p12, By Shane Wright) ‘The global economy is in a “precarious” position and likely to slow, the International Monetary Fund (IMF) has warned amid signs Australian shoppers are reluctant to open their wallets despite falling interest rates and tax cuts. Releasing its mid-year update to its world economic outlook, the … Continue reading

18 July 2019 (AFR) – Turnaround in economic growth forecast: Westpac Melbourne Institute Leading Index

(18 July 2019, AFR, p4, Matthew Cranston, Economics correspondent) ‘The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity into the future, has shown a strong turnaround in the month to June driven by sharemarket gains, better than expected dwelling approval numbers and higher commodity prices. The index, which measures likely growth … Continue reading

16 July 2019 (AFR) – China’s economy slows to 27-year low as Trump’s tariffs bite

(16 July 2019, AFR, p10, Michael Smith, China Correspondent) ‘Shanghai | China’s economy grew at its slowest pace in almost three decades in the second quarter as US President Donald Trump’s trade tariffs weighed on exports and weaker property investment offset Beijing’s stimulus efforts. Traders also warned that restrictions on Australian coal imports would remain … Continue reading

16 July 2019 (AFR) – Confidence surges on tax cuts, property prices

(16 July 2019, AFR, p4, Vesna Poljak) ‘Business conditions have recovered strongly in response to the Morrison government’s $158 billion tax cut package and stability in the housing market, a poll of 251 chief executives finds. The Executive Connection’s quarterly confidence index rallied 16 points to 113 points, signifying a return to positive territory and … Continue reading

13 July 2019 (AFR) – Singapore economy’s surprise contraction a warning for global trade

(13 July 2019, AFR, p14, Enda Curran) ‘An unexpected contraction in Singapore’s economy in the second quarter sent a warning shot to the world economy as simmering trade tensions wilt business confidence and activity. Gross domestic product in the export-reliant city state shrank an annualised 3.4 per cent in the quarter from the first three … Continue reading

12 July 2019 (AFR) – Pressure on Xi as China’s economy continues to slow

(12 July 2019, AFR, p13, Michael Smith, China Correspondent) ‘Shanghai | China’s economic growth is expected to fall to a near 30-year low in the second quarter, as the full impact of Donald Trump’s trade tariffs kick in. This will add to pressure on president Xi Jinping to keep the world’s second-largest economy stable as … Continue reading

12 July 2019 (TheAge) – RBA research shows climbing debt is hitting household spending

(12 July 2019, The Age, p9, By Shane Wright) ‘Australia’s climbing debt levels are hurting the broader economy, with ground breaking research from the Reserve Bank showing a “debt overhang” that is directly hitting households and their ability to spend. In research that could challenge the Morrison government’s hopes for a tax refund-fuelled bounce in … Continue reading

11 July 2019 (AFR) – Buy growth in an improving economy, says Macquarie

[COMMENT: Can this really be true?] (11 July 2019, AFR, p29, Luke Housego, Reporter) ‘Investors are set to benefit from switching out of bond proxies and into growth stocks amid signs the economic environment is improving, say Macquarie analysts. “There are risks to growth from tariffs, but the [Reserve Bank of Australia] has cut rates … Continue reading

4 July 2019 (AFR) – Housing approvals still weak

(4 July 2019, AFR, p29, Su-Lin Tan, Reporter) ‘The downturn in home building has had a small reprieve after the number of national dwellings approved for construction rose slightly in May, not enough however to point to a recovery, economists say. New national dwelling approvals rose by a very weak 0.7 per cent in May … Continue reading

4 July 2019 (TheAge) – The new indicator that tells us something is deeply wrong with the economy

(4 July 2019, The Age, p4, By Shane Wright) ‘Fresh from the Reserve Bank of Australia taking official rates to an all-time low, and making a plea to the Morrison government to loosen fiscal policy, new data shows the car market has stalled. After a home, the next biggest investment for most people is a … Continue reading

4 July 2019 (TheAge) – Victorian shoppers keep their cards in their wallets as economy falters

(4 July 2019, The Age, p1, By Noel Towell) ‘Victoria’s economic growth has ground to a five-year-low as stagnant wages and plunging property prices force consumers to put away their credit cards. Only energy companies had reason to smile in the March quarter, with soaring bills for electricity, gas and other fuels the only things … Continue reading

3 July 2019 (AFR) – Global economy on knife edge as manufacturing weakens

(3 July 2019, AFR, p27, Sarah Turner, Reporter) ‘The global economy is starting the new fiscal year on a knife edge, with Australia slipping into contraction and other regions similarly weak, surveys of manufacturing sentiment show. Some economists are counting on monetary policy easing from the world’s central banks – including from the Reserve Bank … Continue reading

3 July 2019 (AFR) – Cautious optimism – Housing buyer sentiment given another boost

(3 July 2019, AFR, p24, Duncan Hughes, Reporter) ‘Weak buyer sentiment has been given another boost by the RBA’s second cut in two months. Rising auction clearance rates, stabilising property prices and an increase in auction volumes are telltale signs for investors and owner-occupiers that key markets are beginning to recover after two years in … Continue reading