Economist. Views expressed are my own.
Joined February 2017
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David Plank retweeted
ANZ-observed spending in the first week of 2023 was 4% lower than the first week of 2022, despite prices rising close to 8% in 2022 according to our CPI forecast. Households also spent less on key trading days in 2022 compared to 2020 and 2021. @AdelaideTimbrel
ALT Bar chart compares spending over key holiday dates over the last 4 years.
David Plank retweeted
It's easy to attribute any data blip to the much anticipated Spending Slowdown.
But the evidence is mounting. ANZ Consumer Confidence shows people have been worried for some time, pent up demand for travel could be waning, while inflation and interest rate pressures intensify.
The first 10 days of December saw more lacklustre spending momentum, strengthening evidence that households are growing cautious ahead of 2023. It’s more than just the shift to non-retail, which is also middling in December so far. @madelinedunk @adelaidetimbrel
ALT Charts shows spending weakened across all categories.
David Plank retweeted
Policy outlooks for the RBA and RBNZ have diverged, despite seemingly similar inflation problems. We take a look at why. bit.ly/ANZ-Insight-RBA-RBNZ-…
David Plank retweeted
Australia and New Zealand have similar inflation rates, but we expect the RBA cash rate to peak at 3.85% vs the RBNZ OCR at 5.75%. Structural factors and the central banks’ views on economic trade-offs, wages, inflation expectations and neutral rates are key differentials.
ALT Chart showing headline inflation for Australia and New Zealand. The inflation environment looks very similar in Australia and New Zealand, with annual CPI inflation sitting at 7.3% and 7.2% respectively in Q3.
David Plank retweeted
Sydney housing prices have led the fall in Aus housing prices, but other capitals are following suit. We expect a peak-to-trough decline of 18%. #ausecon #housing @felicity_emmett @AdelaideTimbrel
ALT Chart compares changes inhouse prices for Australia's capital cities.
Spending on Black Friday was up this year compared to 2019. No doubt inflation has contributed to that but we see decent momentum pre and post Black Friday as well. November is shaping up as a bounce in retail compared to October.
Australian shoppers embraced Black Friday sales. This has helped boost ANZ-observed spending in November. #ausecon #retail #ausbiz @madelinedunk @DavidPlank12
ALT Bar chart compares spending on Black Friday sales in Australia by category for 2019 and 2022. Overall spending increased in 2022.
David Plank retweeted
ANZ-Roy Morgan Aus Consumer Confidence rose 1.8% (5.6% over the past three weeks) to its highest since early October. But it is still very weak. ‘Financial situation compared to a year ago’ up 9% and ‘Financial situation next year’ up 2.8% drove the rise. #ausecon @DavidPlank12
ALT Chart shows consumer confidence up 1.8% but still far below average.
The Q4 WPI due in mid February is shaping up as a very critical data point. If it indicates wages growth is picking up sharply then a 4%+ cash rate may be needed.
ANZ Australian Macro Weekly: This week’s data cements a 25bp rate hike in December. We think at least a further 75bp will come in 2023. Increasingly we are asking whether our current peak of 3.85% will prove to be high enough. #ausecon @DavidPlank12
ALT Chart compares labour market conditions and wage growth since 2007. Both climbing sharply since 2020 and well above pre-pandemic levels.
More and more the data on inflation and wages suggest Australia is lagging global trends rather than following a different path.
David Plank retweeted
International visitors are coming back to Australia, but a lack of arrivals from China is slowing the recovery. Arrivals from India are almost back at pre-COVID levels, and we think there’s lots of upside for the Indian tourist market. #ausecon @madelinedunk @felicity_emmett
ALT Bar chats compares visitor arrivals from various destinations for September 2019 and September 2022. China is lagging.
Finally some respite from the relentless fall in confidence. But sentiment is still effectively at "recessionary" levels. So far this hasn't translated into a pullback in spending. Whether this disconnect continues is a key issue for the outlook and monetary policy.
ANZ-Roy Morgan Australian Consumer Confidence: prospects over the next year drove a 2.7% rise overall, with 31% (+1.3ppt) of people expecting to be 'better off' financially this time next year and 8% (+1.4ppt) expecting 'good times' for the economy. #ausecon @DavidPlank12
David Plank retweeted
Can’t stop won’t stop
ANZ data: spending picked up in early Nov. An upward trend for non-food retailers was stronger than 2019 and encouraging ahead of the holiday trading period. Stable furniture & travel agent spending suggests households aren’t delaying large purchases. #ausecon @adelaidetimbrel
ALT Chart compares spending observed using ANZ card machines over the last 3 years and shows steady solid spending this year.
Inflation expectations have surged in recent weeks. This has also driven consumer confidence lower. Which makes for a tough backdrop for RBA policy considerations.
ANZ-Roy Morgan Aus Consumer Confidence: household inflation expectations climbed to 6.8%, its highest level since these data were first collected in April 2010. Falling confidence and rising inflation expectations creates a difficult mix for the #RBA. #ausecon @DavidPlank12
ALT Chart shows inflation expectations at an all-time high.
David Plank retweeted
Australia’s super funds hold more than $3.5trn in assets. Of this, more than 16% is invested overseas. This has driven the shift in Australia’s net equity holdings: since 2013, Australians have owned more equity overseas than non-residents own in Australia.
Australia is now a net equity exporter. This has driven its net foreign liabilities (as a percent of GDP) to record lows. #ausecon @madelinedunk
This is a really important change to Australia's standing in the world that matters for a number of reasons.
Australia is now a net equity exporter. This has driven its net foreign liabilities (as a percent of GDP) to record lows. #ausecon @madelinedunk
David Plank retweeted
Rate hikes are hitting total AU housing lending ex refinancing, which is now $8.1bn down from its peak but still $7.6bn up from the average in 2019. While building approvals are down from homebuilder highs, rate hikes are not flowing through convincingly @AdelaideTimbrel #ausecon
ALT Chart showing Australian housing lending is halfway back to its 2019 average
David Plank retweeted
We have upgraded our Australian CPI forecasts with headline inflation to peak at 8.0% y/y and trimmed mean at 6.6% y/y in Q4. #ausecon @cfbirch
David Plank retweeted
The report makes for bleak reading. And the latest ANZ data suggests we are finally starting to see spending react to weak sentiment - albeit modestly.
ANZ-Roy Morgan Australian Consumer Confidence falls 1.5% as inflation expectations surged to the highest level in more than a decade in response to the Q3 CPI data. #ausecon @DavidPlank12 @RoyMorganAus
The report makes for bleak reading. And the latest ANZ data suggests we are finally starting to see spending react to weak sentiment - albeit modestly.
ANZ-Roy Morgan Australian Consumer Confidence falls 1.5% as inflation expectations surged to the highest level in more than a decade in response to the Q3 CPI data. #ausecon @DavidPlank12 @RoyMorganAus
We’ve been calling for a cash rate above 3% since the beginning of the year, though initially not as quickly as looks likely. The question now is whether it might go above 4%. We think not at this stage, but it’s a close call.
ANZ Australian Macro Weekly: We expect the RBA to push its inflation forecast for 2022 above 8%. Despite this we think the RBA will stick with a 25bp move in November and also go in December with an eventual peak of 3.85% by May-23. #ausecon @DavidPlank12
