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Author Archives: Ricardo
Q1’19 CPI makes strong case for 7 May RBA cut
The slow pace of inflation in Q1 makes a very strong case for a 25 bps reduction of the RBA’s policy rate on 7 May, to 1.25%. The key trimmed mean inflation measure increased 28bps to be 1.6% higher over … Continue reading
Posted in AUD, CPI, economics, monetary policy, RBA, Uncategorized
4 Comments
Q1’19 CPI, the RBA and May
The case for the RBA to cut their cash rate at their 7 May meeting has been beaten up by the RBA’s own views on the GDP data, but I still think that the data makes a decent case for … Continue reading
IMF downgrades, RBA to follow
The IMF today downgraded global growth 20bps to 3.3%yoy (lowest since GFC), and said that the risks are skewed to the downside. Among Australia’s key trading partners, Chinese growth was bumped up 10bps to 6.3%yoy; Japanese growth -10bps to 1%yyo; … Continue reading
Posted in AUD, economics, monetary policy, RBA
6 Comments
What’s the State of the Economy?
The RBA made a subtle change to their concluding paragraph of their April post-meeting statement last week. Given that they had used the same words for the prior thirteen statements, and that the change occurred alongside downgrades to domestic and … Continue reading
Posted in AUD, economics, monetary policy, RBA
1 Comment
RBA sets up for May
The RBA today set up for a rate cut on 7 May. After thirteen months in a row where they cut and paste the following words: the Board judged that holding the stance of monetary policy unchanged at this meeting … Continue reading
Posted in AUD, economics, monetary policy, RBA
4 Comments
The case for an April easing bias
The RBA board will discuss the disappointing Q4’18 GDP data for the first time at their 2 April board meeting. The size of the downgrade is so large, and the domestic and global data for Q1’19 has been so weak, … Continue reading
Posted in AUD, monetary policy, RBA
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Underwater mortgages
The fact that Australian house prices are now back to 2016 levels (or below in some areas) means that there is a rising number of property transactions where the purchase price is now above the current valuation (or more importantly, … Continue reading
Posted in AUD, economics, Housing
5 Comments
The right way to think about Job Vacancies
My read of recent RBA communication, particularly RBA Ellis’s speech on the household sector earlier this week, is that the Bank is worried about a consumption slowdown that bleeds into the rest of the economy. It is therefore through that … Continue reading
Posted in AUD, economics, RBA
5 Comments
The RBA’s Consumption trigger
RBA Assistant Gov (Economic) Luci Ellis this morning gave a very careful speech on the household sector. In particular, it goes into some detail about why household income in the national accounts has looked so weak despite a firm labour … Continue reading
Posted in AUD, economics, Labour Market, RBA
8 Comments
Don’t give up on a May RBA cut
The decline of the unemployment rate to 4.9% in February caused the market to substantially reduce the implied probability of a rate cut in May. This is understandable, but i think it’s wrong. What’s wrong with this is that the … Continue reading
