CommBank View: Economics & Markets

The CommBank Household Spending Intentions Index fell by 10% in January 2022. January is a seasonally weak month after a surge in Christmas spending. However the Omicron outbreak did subdue spending further. Falls were largest in retail, entertainment and household services and more muted in insurance, utilities and education. Stephen Halmarick, Chief Economist and Belinda Allen, Senior Economist...

It has been an eventful two weeks for the outlook for interest rates with the Q4 21 CPI surprising to the upside. As a result we now expect the cash rate to be lifted in August 2022 (was November 2022). The RBA, in its February Board Meeting and a speech by Governor Lowe, continued to remind financial market participants that the cash rate will not be raised until the Board is confident inflation...

The CommBank Household Spending Intentions index rose by 2.5% rise in December to 115.0. This was the highest level since July 2017. Kim Mundy, Senior International Economist talks to Belinda Allen, Senior Economist who details the main drivers of the lift in spending in December. A seasonal upswing in Retail spend as well as continued lift in Travel and Transport spend post the extended Delta loc...

In our first podcast for 2022 our Head of Australian Economics, Gareth Aird and Senior Economist, Belinda Allen discuss the surge in COVID cases and what it means for the Australian economy. There will be short term disruption to both demand and supply due to the sheer number of people in isolation. Hours worked and spending will fall. But over the rest of 2022 we expect the unemployment rate to t...

In our final podcast for 2021 Chief Economist, Stephen Halmarick and Belinda Allen, Senior Economist reflect on the key themes of 2021 and how these will evolve over 2022. COVID remains the key risk but for 2022 we expect climate change, inflation and central banks removing monetary policy accommodation and lifting interest rates will dominate the landscape locally and globally. Thank you to liste...

The growing recognition of the interconnectedness between climate change and biodiversity loss has helped accelerate the biodiversity agenda in both part 1 of COP15 and COP26.  Carol Kong, Senior Associate Currency Strategy and International Economics and Belinda Allen, Senior Economist discuss the key biodiversity developments that arose from the two conferences.  Biodiversity will increasingly b...

The Chinese economy slowed in 2021 as regulator tightening was implemented and as structural reform and decarbonisation policies were explored. As we approach 2022 Kevin Xie, Senior Asia Economist and Belinda Allen, Senior Economist explore the outlook for 2022 as policy makers balance pro-growth near-term policy setting against medium term goals. Kevin dives in to the outlook for COVID policy as...

The November edition of the CommBank Household Spending Intentions index rose by 2.1% in the month to reach 110.3, the strongest level since December 2019 and recouped gains lost during COVID lockdowns. Stephen Halmarick, Chief Economist and Belinda Allen, Senior Economist discuss the results in the latest podcast and break down the major rises and falls. The gains in the index were led by Transpo...

GDP fell as expected in Q3 21 but the fall was smaller than consensus. The 1.9% contraction was the third largest in history, driven by a fall in household consumption due to lockdowns in NSW, Vic and the ACT. Business investment, dwelling investment and net exports all added to growth, as did the government sector. Gareth Aird, Head of Australian Economics and Belinda Allen, Senior Economist run...

The Australian housing market has performed strongly in 2021.  Dwelling prices have risen by a little over 20% nationwide. However rising fixed rate mortgages, affordability constraints and a change by APRA to the serviceability buffer are expected to see dwelling price growth moderate over 2022.  Following an expected 7% increase in prices over 2022, we forecast an orderly fall of 10% in home pri...

The highly anticipated COP26 conference in Glasgow has concluded. In this podcast Kim Mundy, Senior Economist, International Economics & Currency Strategy and Belinda Allen, Senior Economist, discuss the key takeaways from the conference. While new net zero pledges were made and a push to reduce global methane lifted, countries pledges still fall short of the Paris Agreement’s goals. One upside fo...

Welcome to the podcast for the first edition of our new CommBank Household Spending Intentions (HSI) Index. In this podcast Stephen Halmarick, Chief Economist and Belinda Allen, Senior Economist discuss the launch of the new HSI index and its enhancements through the addition of five new spending categories to compliment the seven already in place. This now means the HSI index tracks almost all ty...

It was a big week for central banks with market expectations pricing in changes of interest rate rises earlier than central bank guidance. Joseph Capurso, Head of International Economics and Kristina Clifton, Senior Economist dive into the details with Belinda Allen, Senior Economist.  The Reserve Bank of Australia (RBA) abandoned its yield curve target but pushed back against interest rate hike e...

High vaccination rates and an earlier than expected reopening of the NSW and Victorian economies have led us to upgrade the economic outlook for Australia. Gareth Aird, Head of Australian Economics discusses with Belinda Allen, Senior Economist how our numbers have changed given these developments. With the labour market forecast to perform very well in 2022 and inflation moving higher it also bri...

The RBA first introduced its inflation target almost 30 years ago. Up until 2016 the RBA had been successful at meeting this target. In this podcast Stephen Halmarick, Chief Economist and Belinda Allen, Senior Economist discuss why there have been recent calls for a review of the inflation target, the reasons why inflation has undershot and if a review should be conducted.   ------ DISCLAIMER ----...

In this podcast Chief Economist, Stephen Halmarick discusses the September Household Spending Intentions series with Belinda Allen, Senior Economist. The overwhelming message is one of stability – after a number of months of significant volatility. Home buying, Retail, Travel, Health & fitness and Motor vehicle spending intentions all showed signs of stability and consolidation in September, after...

In this podcast the Australian Economics team led by Gareth Aird deep dives into two different issues impacting the Australian economy. First, Kristina Clifton and Stephen Wu discuss the housing component of CPI (which is the largest) and how it is being impacted by various government grants but also rising material costs. Rents are also important and these are expected to lift. Belinda Allen then...

In this podcast Head of International Economics, Joseph Capurso and Belinda Allen, Senior Economist discuss the changing composition of global economic growth. In 2022 growth of 4.4% is expected after a lift of 6.5% in 2021. However the US and China is expected to expand by less than earlier expected while the UK and the Eurozone are experiencing an acceleration in growth. Inflation is rising, and...

Nature related risks are growing in recognition and importance, and the rapid decline in biodiversity is a growing potential risk for businesses. In this podcast Carol Kong, Senior Associate, International Economics and Currency Strategy discusses with Belinda Allen, Senior Economist what the developments of the Taskforce on Nature-related Financial Disclosures and the post-2020 global biodiversit...

In this podcast Belinda Allen, Senior Economist speaks with Agriculture Strategist, Tobin Gorey and they revisit the thematic of ‘More, and Better Food”. The focus in this episode is how income levels in particular economies have changed over the past forty years and where the opportunity lies going forward. This theory has been a mainstay of the opportunity around the agriculture space. The data...

The concept of ‘common prosperity’ has dominated the policy landscape in China recently. The key objective is to create a fairer and more equal ‘social welfare society’ and is a long term policy goal. Policy changes will be gradual but there will be macroeconomic implications. In this podcast Kevin Xie, Senior Asia Economist and Belinda Allen, Senior Economist discuss the concept of common prosper...

The inflation debate has been one consistent theme in 2021. In this podcast Gareth Aird, Head of Australian Economics and Belinda Allen, Senior Economist discuss how the potent combination of Quantitative Easing and direct cash payments from government to households will boost future spending and lead to higher consumer inflation over the next few years.  We retain our call that the RBA will comme...

In our latest podcast Joseph Capurso, Head of International Economics and Belinda Allen, Senior Economist dive into wages, inflation and interest rates in the US. The Employment Cost Index and a very high quit rate suggests US wages pressures are rising. Stronger growth in wages is adding to an already strong consumer inflation pulse. Joseph draws implications for the US Federal Reserve’s interest...

The Commonwealth Bank Household Spending Intentions series for August 2021 continued the run of data showing the economic impact of the lockdowns currently in place in NSW and Victoria.  These lockdowns had a considerable impact on the HSI in August as it will over coming months till restrictions ease. Lockdowns are also significantly impacting labour market data, but incomes are holding up due to...

In our latest podcast, Stephen Halmarick, Chief Economist speaks with Belinda Allen about his latest Vantage Point piece titled Tactics and Strategy. Stephen runs through how policy around COVID has shifted with vaccinations now ramping up and how internally generated CBA data is tracking in August and early September. Belinda and Stephen also discuss themes in feedback from CBA corporate clients...