Australian interest rates

Here comes the bear doves, via The AFR: Tim Toohey was the local chief economist at Goldman Sachs for more than a decade.

Home buyer demand increased recently following the federal election and expectations of an imminent interest rate cut from the Reserve Bank of Australia (RBA). As illustrated below, final auction clearance rates (current to 18 May) showed a marked rebound across Sydney, Melbourne, and the combined capital city markets.

Australia is a kind of mind-moulding autocracy in which the words “immigration” and “racist” are interchangeable.

Westpac summarises the drivel.

The media release accompanying the Reserve Bank of Australia’s (RBA) 0.25% cut to the official cash rate (OCR) on Tuesday was a fairly vanilla affair that took a neutral stance.

Treasurer Jim Chalmers has not ruled out extending the federal government’s $6.8 billion energy rebates again.

Gareth Aird, head of Australian economics at CBA, notes that markets have priced a 95% probability of the Reserve Bank of Australia (RBA) cutting the official cash rate by 0.25% at Tuesday’s monetary policy meeting.

Alex Joiner from IFM Investors has published the following chart showing the sharp reversal of interest rate pricing in the futures market.

The Australian Bureau of Statistics (ABS) has released the Q1 wage price index, which rose by 0.9% over the quarter to be 3.4% higher year-on-year: The result was stronger than expected, with analysts tipping a 0.8% rise over the quarter and 3.2% year-on-year.

Global oil prices fell to around $US60 per barrel last week after peaking above $US80 earlier this year and holding above $US70 just before “Liberation Day”.

The official Q1 CPI inflation print from the Australian Bureau of Statistics (ABS) revealed that the policy-important trimmed mean inflation fell to 2.9% year-on-year to be within the Reserve Bank of Australia’s (RBA) inflation target of 2% to 3%.

Goldman’s excellent Andrew Boak is still on point.

Twitter (X) user Oliver in WA posted the following stunning chart showing how Australians are heavily overweight in housing (4.5 times GDP) compared to other English-speaking nations.

From Goldman: From a macro perspective, we leave our forecasts for Australia unchanged given the outcome was not a surprise and the ALP’spost-Budget policy announcements have been fairly modest (0.0-0.1% of GDP).

The following graphic from CoreLogic shows Australia’s housing affordability was the worst on record at the end of 2024.

NAB chief economist Sally Auld has predicted heavy interest rate cuts this year, beginning with a 0.50% cut at the 20 May meeting.

Goldman wraps a Q1 dud. Nominal retail sales rose 0.3%mom in March, broadly in line with expectations (GSe: +0.2%mom, BBG: 0.4%mom).

This week’s CPI data from the Australian Bureau of Statistics (ABS) confirmed that the post-pandemic inflation surge is firmly in the rearview mirror. Australia’s policy-relevant underlying inflation fell to 2.9% in Q1 2025, to be tracked within the Reserve Bank of Australia’s (RBA) target range of 2% to 3%.

The Australian Bureau of Statistics (ABS) Q1 CPI release revealed that housing inflation is slowing rapidly, contributing to lower trimmed mean inflation.

The Australian Bureau of Statistics (ABS) has released the all-important Q1 2025 CPI inflation print.

On Wednesday, the all-important Q1 CPI will be released by the Australian Bureau of Statistics (ABS).

Westpac chief economist Luci Ellis published a note on the bank’s outlook for interest rates.

The Reserve Bank of Australia (RBA) is famously bad at forecasting Australian wage growth. For the past 15 years, the RBA’s Statement of Monetary Policy (SoMP) has routinely forecast stronger wage growth than has occurred.