Economics

The Reserve bank of NZ has held its key interest rate steady and left other support measures unchanged after its latest monetary policy meeting at which it appears to have backed off moves to take rates negative.

Despite a drop in iron ore, meat and coal exports, Australia’s trade performance started 2021 strongly with a merchandise surplus of $8.754 billion in January, little changed from the $8.956 billion in December.

Normal service has been restored in the economy, judging by the January labour force figures from the Australian Bureau of Statistics which showed another fall in the unemployment rate.

Growth in the UK economy slumped by record 9.9% in 2020, the biggest annual crash in output in more than 300 years.

For several months now American financial markets – well the more panicky and younger types – have been wetting themselves about inflation. The Fed, as it turns out, not so much.

Australia recorded its highest ever yearly trade surplus in calendar 2020 of more than $72 billion, according to data from the Australian Bureau of Statistics.

Local markets will be watching the Reserve Bank closely this week for an update on how the country’s main economic policymakers view the coming year.

The US shares the spotlight with China in the week ahead, with both countries reporting data that will likely set the scene in markets for the next few months.

The optimistic outlook for the Australian economy this year from the International Monetary Fund has been supported by the first business conditions and confidence survey for the year from the National Australia Bank.

The IMF reckons the Australian economy will grow by enough in 2021 to regain its pre-COVID level by the end of the year before slowing in 2022.

COVID saw the economy in South Korea – one of Australia’s top five export destinations with products dominated by iron ore, copper, coal and meat and some grains – hit a 20-year low in 2020 as the economy lost steam amid a resurgence of coronavirus infections and lockdowns.

An in-depth look at all the key economic drivers and their potential effects on local and global markets this week.

Thanks to a boom in part time jobs, unemployment ended the difficult 2020 calendar year well below the 8% rate forecast by the Reserve Bank in its fourth and final Statement on Monetary Policy last November.

China’s GDP was up 6.5% year-on-year for the December quarter, much stronger than the 6.1% forecast by economists and well up on the 4.9% growth in the previous period.

China ended 2020 with a rush as it notched up two of its biggest ever trade surpluses in November and December, posting a surplus of $US78.17 billion in December and topping the previous peak in November of $US75.40 billion in November.

Further evidence yesterday that the Australian labour market is doing better than anyone thought for most of 2020 with news from the ABS that job vacancies have regained pre-pandemic levels.

A big week ahead for the Chinese economy with confirmation it was the standout performer in 2020 with GDP, production, investment, retail sales and inflation data to show another round of improvement.

A solid performance from services and better import figures have helped soften the fall in the physical goods trade surplus for November.

Data from the Australian Bureau of Statistics (ABS) revealed that housing approvals hit their highest level in 21 years in November while the value of renovations sat at an all-time high in the same month.

Some signs of cooling in China’s huge manufacturing sector as it ended a chaotic 2020 in December, according to the first survey of activity for the month from the country’s National Statistics Bureau on New Year’s Eve.

For the first time in two years, Australia’s goods trade surplus sank under the $2 billion level, according to the Australian Bureau of Statistics (ABS). And you can blame China for that fall – both on the export and the import side.

Believe it or not but the pandemic and the worst recession Australia has experienced in 90 years have not damaged Australia’s national finances (yet). In fact a glancing blow over two quarters might be the surprising conclusion from the latest data from the Australian Bureau of Statistics.