CommBank Global Economic & Markets Update podcast

March Household Spending Intentions

The Commonwealth Bank Household Spending Intentions series for March 2021 showed improvement across five of the seven spending categories.  In this podcast Stephen Halmarick, Chief Economist and Belinda Allen discuss how some of the annual percentage changes are now being distorted by the impact on spending from the onset of the Covid-19 restrictions of a year ago. March 2021 saw strong gains in spending intentions for Home Buying, Travel, Entertainment, Education and Motor vehicles.  Health & fitness spending intentions consolidated recent gains, while Retail spending intentions were weak - but this was largely a payback for the spike higher seen in March last year.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. The data used in the ‘Commonwealth Bank Household Spending Intentions’ series is a combination of the CBA Data and publically available Google Trends™ data. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Australian unemployment rate to hit 5% end 2021

We have lowered our Australian unemployment rate forecast to 5% at end 2021. Listen to Gareth Aird, Head of Australian Economics and Belinda Allen, Senior Economist discuss how the forward looking indicators of labour demand prompted the updated view. As a result wages growth has been revised up, as has underlying inflation. Gareth also provides the latest thinking on the RBA’s policy suite and what the latest forecasts mean for the cash rate, yield curve control and quantitative easing.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Is the US economy about to overheat?

A big question for this year is how fast will the US economy grow? In this podcast with Belinda Allen, Senior Economist and Kim Mundy, Senior Economist & Currency Strategist discuss three key growth elements and their potential to overheat the US economy in 2021; The American Rescue Plan Act, the vaccination roll-out and the infrastructure plan. Importantly the outlook for the US economy will be critical for the US FOMC’s reaction function.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Is there another commodities super-cycle underway?

There is an emerging theory that another commodities super-cycle is underway. In this podcast Belinda Allen, Senior Economist discusses the hypothesis with Vivek Dhar, Mining and Commodities Strategist. Three factors are discussed; the transition to a decarbonised economy, supply constraints & investment spend and reflation. Altogether Vivek thinks the rise in commodity prices over the last year is indicative of a cyclical recovery than a long dated super -cycle. A super -cycle would likely require India and/or Vietnam to industrialise and urbanise.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Views from seeing Australian corporates

In a change of pace this week we discuss feedback from recent trips around Australia visiting corporate clients. Both Martin Whetton, Head of Fixed Income & Currency Strategy and Gareth Aird, Head of Australian Economics have travelled to different parts of Australia including WA, Queensland and South Australia.  They have also spoken to clients in Victoria and NSW. The feedback has been overwhelmingly optimistic on the domestic economic outlook. Common themes emerged including labour shortages, pockets of wages pressures and ‘cream spending’.  Gareth and Marty also detail the feedback around interest rates and how that matches with our view on the RBA and economic outlook.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Where does Australia fit in the world’s carbon footprint?

In our latest podcast, we continue with our recent thematic research on environmental issues. Given the current global focus on net zero carbon emission targets, we take a step back and discuss how to measure an economy’s carbon footprint and how carbon is produced and consumed. Joseph Capurso, Head of International Economics and Belinda Allen then discuss Australia’s carbon footprint, what it means and how it could be reduced.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

The end of LIBOR

In a step away from the economy, this podcast delves into what the end of LIBOR means for financial markets. Martin Whetton, Head of Fixed Income & Currency Strategy, discusses with Belinda Allen Senior Economist what LIBOR is and why it is ending. For any issuers or borrowers in debt markets this is an important topic to be aware of and Martin discusses what LIBOR will be replaced with, when and what the call to action is.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

 

February Household Spending Intentions and RBA recap

The Commonwealth Bank Household Spending Intentions series for February 2021 showed mixed results across the seven spending categories, but overall continued to point to ongoing improvement in household spending in the Australian economy. Stephen Halmarick, Chief Economist and Belinda Allen, Senior Economist discuss the major results with a focus on Home Buying, Health & fitness, Entertainment and Education spending intentions. They also discuss how upcoming base effects will impact the readings going forward. Stephen also shares his latest thinking on the RBA post Governor Lowe’s most recent speech.

 

“------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. The data used in the ‘Commonwealth Bank Household Spending Intentions’ series is a combination of the CBA Data and publically available Google Trends™ data. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

The end of JobKeeper and outlook for the States & Territories

We cover two different issues in our latest podcast between Belinda Allen and Nic Guesnon from the Australian Economics team. Firstly the impact of the end of JobKeeper is discussed and how this will impact the labour market. We expect around 110k jobs could be lost by the end of the wage subsidy and a number of key industries are likely to wear the brunt. Secondly we discuss the performance of the various state and territories in 2020, what is driving the divergence and what we expect in 2021.

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.

Central bank outlook

Recent financial market activity, particularly the bond market would suggest that lifts in short term rates are coming down the pipeline by central banks. In this podcast Joseph Capurso, Head of International Economics and Belinda Allen, Senior Economist discuss what central bankers are focussed on when looking at tightening monetary policy. A focus on actual inflation rather than expected inflation has been a recent change in thinking. The interplay of fiscal policy and economic data is also discussed as well as the outlook for the major central banks.

 

 

------ DISCLAIMER ------

Before listening to this report, you are advised to read the full Global Markets Research disclaimers which can be found at www.commbankresearch.com.au. Information in this podcast is of a general nature only. It does not take into account your objectives, financial situation or needs and does not constitute personal financial advice. This report provides general market-related information, and is not intended to be an investment research report. The information contained in this report is approved and distributed by Global Markets Research, a business division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (“the Bank”). The information is solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or other financial instruments. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. As the statistics take into account only the Bank’s data it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The Bank believes that the information in this presentation is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made.