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2.Economic forecasts

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7 Feb 2020 (AFR) – Economy had more momentum – Economists see end of RBA’s rate cut cycle

(7 February 2020, AFR, p1, Matthew Cranston, Sarah Turner and Sue Mitchell) ‘Surprising strong consumer spending in the final three months of 2019 has triggered investors to upgrade retail stocks and abandon calls for another interest rate cut this year. The stronger than expected growth in retail trade in the December quarter supports Reserve Bank … Continue reading

5 Feb 2020 (TheAge) – Rinse, repeat: The RBA must ditch its permanently Panglossian view

(5 February 2020, The Age, p31, David Scutt) ‘The RBA has put its rose-tinted glasses back on, having temporarily removed them late last year, predicting a Goldilocks outcome of stronger economic growth, lower unemployment and a continuation of low inflation in the period ahead. The bank said in its policy announcement today it expects economic … Continue reading

30 Jan 2020 (AFR) – America’s epic budget blowouts will just keep growing

(30 January 2020, AFR, p10, Jacob Greber, United States Correspondent) ‘Washington | The United States will spend most of the 21st century mired in ballooning government debt as a new spending surge and the Trump administration’s tax cuts push this year’s deficit above $US1 trillion ($1.48 trillion). The independent Congressional Budget Office has painted a … Continue reading

25 Jan 2020 (AFR) – International fallout from bushfires a big risk for investors

(25 January 2020, AFR, p23, Simon Evans, Sue Mitchell, James Fernyhough and Jenny Wiggins) ‘… Goldman Sachs has estimated the bushfire fallout could strip 0.4 per cent off Australia’s GDP, with the international dimension a potentially long-term drag. ‘ <snipped…> ‘A raft of profit downgrades from ASX-listed companies in the retail and tourism sectors in … Continue reading

17 Jan 2020 (AFR) – Trump deal spells pain for Australian exporters

(17 January 2020, AFR, p11, Jacob Greber, United States Correspondent) ‘Washington | Australian dairy, beef, energy and coal exporters could become collateral damage from Thursday’s historic phase-one US-China trade deal, hailed by Donald Trump as a “landmark” reset to global commerce. In an agreement almost immediately lambasted by critics for its emphasis on managed purchase … Continue reading

17 Jan 2020 (AFR) – Retailers suffer as consumers pocket tax cuts

(17 January 2020, AFR, p9, Michael Bleby, Senior Reporter) ‘Cautious consumers are using tax refunds and savings from lower borrowing costs to save and reduce debt, rather than putting it back into the retail economy, economists warn. Analysis by UBS economists George Tharenou and Carlos Cacho of Reserve Bank of Australia figures shows credit card … Continue reading

16 Jan 2020 (AFR) – Home building, Housing construction expectations surge

(16 January 2020, AFR, p29, Michael Bleby, Senior Reporter) ‘Housing construction is set to pick up in the second half of this year, after sentiment around residential construction posted its biggest lift in six years on the back of an improving property market and access to credit. The ANZ/Property Council of Australia March 2020 survey … Continue reading

16 Jan 2020 (AFR) – Super funds record best year since 2013

[COMMENTS: Because of my own distrust of managed funds in general, including superannuation funds, I always post reports like this one below with some comments like the following. It will be interesting to see how these funds perform over the next couple of years because it is common for a superior fund one year to … Continue reading

15 Jan 2020 (AFR) – China’s economy to slow as trade, property risks linger

(15 January 2020, AFR, p11, Michael Smith, China Correspondent) ‘Shanghai | China’s slowing economy has been given a temporary reprieve from Donald Trump’s tariff ceasefire, but is not out of the woods yet, economist have warned. Leading economists said on Tuesday that the risk of further confrontation with the US on trade, along with geopolitical … Continue reading

8 Jan 2020 (AFR) – Australian economy – From banana republic to Pacific Switzerland?

(8 January 2020, AFR, p13, Jonathan Shapiro, Senior Reporter) ‘There is no more defining moment in Australia’s economic history than in May 1986, when then federal treasurer Paul Keating told radio host John Laws the nation was in danger of becoming a “banana republic”. For the three decades that followed those two words resonated among … Continue reading

10 Jan 2020 (AFR) – World Bank gloomy in spite of easing US-China tensions

(10 January 2020, AFR, p25, Chris Giles) ‘London | The easing of trade tensions between the US and China is unlikely to lead to a rapid improvement in the global economy, the World Bank has said as it released a gloomy set of forecasts. The development bank downgraded the growth outlook for most countries over … Continue reading

8 Jan 2020 (AFR) – Bushfires to hit economic growth: Goldman Sachs

(8 January 2020, AFR, p6, Matthew Cranston, Economics correspondent) ‘Economic growth will take a 0.3 percentage point hit over the December and January quarters due to Australia’s bushfire crisis, according to the latest analysis from Goldman Sachs. As the fires have raged, financial markets have priced in a higher chance of another 0.25 percentage point … Continue reading

8 Jan 2020 (AFR) – Job ads plummet as fires torch confidence, cast shadow over economy

(8 January 2020, AFR, p1, Vesna Poljak and Hannah Wootton) ‘The bushfire emergency has hit the outlook for the jobs market and caused consumer confidence to slump to its lowest level in four years in the first indication of the toll the deadly crisis is taking on economic activity, amid fears of worsening conditions later … Continue reading

4 Jan 2020 (AFR) – China, India set to overtake US economy by 2030

(4 January 2020, AFR, p7, Liz Main, Reporter) ‘China and India will eclipse the United States as world economic super powers and Asia will account for 35 per cent of the world’s gross domestic product by 2030, according to research by KPMG. “It will be in the next decade, for sure,” said Doug Ferguson, head … Continue reading

3 Jan 2020 (AFR) – Singapore posts decade-low growth as trade war bruises output

(3 January 2020, AFR, p10, Aradhana Aravindan and John Geddie) ‘Singapore | Singapore’s economy expanded at its slowest pace in a decade last year as its manufacturing sector contracted, preliminary data showed on Thursday, though fourth-quarter data firmed expectations for a modest recovery in 2020. The export-oriented economy has been hit hard by the drawn-out … Continue reading

27 Dec 2019 (AFR) – Growing concerns as housing markets set to surge in 2020

(27 December 2019, AFR, p6, Nila Sweeney, Reporter) ‘Home values in Australia’s biggest cities are on course to record up to 14 per cent growth in 2020 as low mortgage rates and easier lending standards unleash buyer demand. But analysts warn worsening housing affordability and more homes on the market could cut the bull run … Continue reading

20 Dec 2019 (AFR) – NZ economy grows faster than expected

(20 December 2019, AFR, p30, Praveen Menon) ‘New Zealand’s economy grew at a faster-than-expected pace in the third quarter boosted by robust retail spending, the government said on Thursday, briefly sending the Kiwi dollar higher. The statistics office said New Zealand’s gross domestic product (GDP) grew 0.7 per cent quarter-on-quarter in the three months to … Continue reading

20 Dec 2019 (AFR) – Australians never been richer, while debt burden easing

(20 December 2019, AFR, p3, Matthew Cranston, Economics correspondent) ‘Australian households have never been wealthier, due to house prices rising and mortgages getting cheaper, but nevertheless, they are spending less. The latest data from the Australian Bureau of Statistics shows that the average household wealth increased by $10,698 in the September quarter to an all-time … Continue reading

19 Dec 2019 (AFR) – Iron ore leads record $281b mining exports

(19 December 2019, AFR, p6, Matthew Cranston, Economics correspondent) ‘Resource and energy export earnings are forecast to reach a record $281 billion this financial year before easing back due to softer prices, according to the government’s official resources and energy forecaster. Record highs driven by iron ore, LNG and coal are set to ease back … Continue reading

18 Dec 2019 (AFR) – Retailers: Festive spirit missing in action as Australia burns

(18 December 2019, AFR, p19, Sue Mitchell, Senior Reporter) ‘Retailers are counting on a surge in spending over the next week after enduring “standard” sales volumes in December to date. The week before Christmas is usually the busiest of the year for bricks and mortar retailers as consumers stock up on food and drinks and … Continue reading

17 Dec 2019 (AFR) – Interest rates: Rate cut chance surges on wages downgrade

(17 December 2019, AFR, p4, Matthew Cranston, Economics correspondent) ‘Forecasts for economic growth, inflation, unemployment and wages have all taken a hit in the latest budget update, placing pressure on the Reserve Bank to cut interest rates in February. Before the budget update, financial markets were pricing in a 39 per cent chance of a … Continue reading

16 Dec 2019 (AFR) – Global economy: Trade, Tories place a floor under the global economy

(16 December 2019, AFR, p24, Sarah Turner, Reporter) ‘A partial trade deal between the US and China and a thumping Conservative win in the UK election appear to have effectively placed a floor under the global economy, underpinning markets as they head into the new year. Investor anxiety had been rising ahead of the British … Continue reading

13 Dec 2019 (AFR) – Tariff war: Jamie Dimon warns of economic damage from China tariffs James Politi

(13 December 2019, AFR, p27, James Politi) ‘Washington | Jamie Dimon, the chief executive of JPMorgan Chase, has warned Donald Trump that imposing tariffs on additional Chinese goods would inflict damage to the US economy, as the US president faces a decision within days on whether to impose new levies on Beijing. Speaking at the … Continue reading

13 Dec 2019 (AFR) – China steel demand tipped to fall next year

(13 December 2019, AFR, p14, Michael Smith, China Correspondent) ‘Shanghai | China’s chief government forecaster has predicted lower steel demand in 2020, the first decline in five years and possibly bad news for Australian iron ore miners. The China Metallurgical Industry Planning and Research Institute said on Thursday that the country’s steel demand would fall by … Continue reading

13 Dec 2019 (AFR) – Victorian budget takes $430m GST hit

(13 December 2019, AFR, p8, Patrick Durkin, BOSS Deputy Editor) ‘Victorian Treasurer Tim Pallas has signalled cuts to the public service and vowed to hold the line on wages with the unions, after announcing a $430 million hit to the budget caused by a half-billion-dollar write-down in GST receipts from the Commonwealth. Mr Pallas said … Continue reading

9 Dec 2019 (TheAge) – No Christmas retail cheer but hopes for the new year

(9 December 2019, The Age, p12, By Shane Wright) ‘Australian retailers are preparing for a bleak Christmas with many tipping early sales to get customers through the door after one of the worst years on record. Deloitte Access Economics, in its pre-Christmas look at the retail sector, said a combination of weak wage growth, high … Continue reading

6 Dec 2019 (AFR) – Bull run in stocks can go on a ‘bit longer’

(6 December 2019, AFR, p29, Robert GuySenior Writer) ‘Aberdeen Standard Investments chief executive Keith Skeoch says the bull run in global stocks can continue for “a bit longer” as growth is bolstered by central bank stimulus and prolonged low interest rates. From his perch atop a fund manager with $953 billion of assets under management, … Continue reading

6 Dec 2019 (AFR) – Hopes pinned on sales as retail ‘stuck in neutral’

(6 December 2019, AFR, p7, Matthew Cranston, Economics correspondent) ‘Black Friday, Cyber Monday and Christmas retail sales are the new hope for economists after October sales figures showed no growth, adding further concerns about weak consumption and a slow economy.’ <snipped…> ‘Seasonally adjusted retail sales were flat in October, disappointing economists who had expected 0.3 … Continue reading

5 Dec 2019 (AFR) – Sluggish economy needs a kickstart – crying out for stimulus

(5 December 2019, AFR, p7, John Kehoe, Senior Writer) ‘Consumption is persistently weak, as cautious consumers elect to save – not spend – their recent income tax cuts and interest rate reductions. The sluggish Australian economy needs a kick start. Subdued economic growth of 0.4 per cent in the September quarter and 1.7 per cent … Continue reading

4 Dec 2019 (AFR) – First consecutive current surpluses in 46 years

(4 December 2019, AFR, p6, Matthew Cranston, Economics correspondent) ‘Australia has recorded its second consecutive current account surplus – the first time in 46 years – which is expected to contribute 0.2 of a percentage point to Wednesday’s gross domestic product figures. The current account recorded a $7.9 billion surplus, driven by steady growth in … Continue reading