Curve Daily Commentary, April 13, 2015

Balances of Power

Whilst there has been very little data out surrounding the Easter long weekend, the ABS home loan data was possibly the best news of the week, coming in Friday morning.

Predicting the Future - Largest Economies 2030The crux is that the ever growing amount of investment loans grew by less in February at $12.05 billion from $12.47 billion in January. This is in line with the RBA’s monthly minutes stating that they would work with other regulators to “contain risks that may arise from the housing market”. However, the $12.05 billion is still quite a bit higher than the long term average (over the last 15 years) of $843 million per month…

There will be numerous data releases this week with employment figures due on Thursday, the NAB Business Survey on Tuesday and Westpac consumer sentiment on Wednesday. All will yield key insights into how the economy is running and what we should expect out of the RBA for next month’s meeting.

Other than the news on Friday night that Hillary Clinton will be running for President of the United States the largely publicised MacroEconomic Projections were released by the US Department of Agriculture (graph below). The release predicts the size of global economies by GDP in 15 years from now, 2030. The US will still be the #1 economy but narrowly. China will be close behind with the two dwarfing all other economies. Australia will slip two places from #12 to #14 as India, Indonesia and Mexico grow with more pace. To qualify the release the data is couched with uncertainties as the growth rate of China, any wars, and changes in technology to name a few can unsettle the results.