Pete Wargent blogspot


'Must-read, must-follow, one of the best analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Markets & Economics Editor, Sydney Morning Herald.

'I've been investing 40 years & still learn new concepts from Pete; one of the best commentators...and not just a theorist!' - Michael Yardney, Amazon #1 bestseller.

Tuesday, 15 December 2020

Australian QE to be extended through 2021 and 2022

Aussie confidence rebound continues

Consumer confidence continued to increase on the latest Roy Morgan surveys.

In-store card spending also crept higher, to increase to a 9-month high. 

Source: Commsec

Inflation expectations slipped a little lower, however, and remain substantially below pre-pandemic levels. 

Weekly payrolls increased again this week to the highest level in 8 months - James Foster with the charting:

Source: James Foster via ABS

The state of Victoria suffered the biggest hit, but is now recovering, while South Australia suffered a blip from its own 'Pizzagate' shutdown. 

But overall, improvement is happening. 

Source: James Foster

Support to continue

It seemed likely the the Reserve Bank would need to keep support in place until there are defintive signs that we are approaching NAIRU or full employment, which is likely to mean an unemployment rate of about 4½ per cent or thereabouts.

Obviously that's a long way from where we are today at about 7 per cent, and the latest Board Minutes did suggest that the Board is prepared to do more if necessary:

Source: RBA

Bill Evans of Westpac revises his forecast for the size and duration of QE, out until the end of 2022:

Source: Westpac