Monthly Insights BY THE CURVE TEAM –

With over 100 years of collective financial markets experience behind us, we have created Curve’s monthly insights, highlighting important global economic data and providing in-depth analysis to help you better understand the current economic climate.

Our most recent monthly insight papers are available for download with our compliments.

Inflation: Transient or Persistent

  • It is uncertain how sticky rising prices will prove to be. The different forces driving higher prices are relevant to determine whether it will be transitory.
  • Supply side price pressures could prove both temporary and ongoing.
  • Demand side price pressures are contingent on wage growth over the medium to long term.
  • Wages remain the dominant factor that will determine the RBA’s decision on monetary policy.
  • Central Banks will face a challenge if prices rise before wages increase.

Hot Economy Prompts Forecast Upgrades

  • Economic indicators suggest the economy remains resurgent, which will quell the impact of the end of JobKeeper and HomeBuilder.
  • Employment numbers indicate that employers have transitioned the bulk of workers receiving JobKeeper either into part time work or have let them go.
  • Investor activity should keep housing related activity strong.
  • The RBA updated their economic forecasts in the Statement on Monetary Policy for May.
  • While the employment was significantly improved, the upgrades to growth and inflation were more muted.

Optimism Dominates the Outlook

  • Two key government programs – JobKeeper and HomeBuilder ended as of March 31.
  • The economy is expected to hold up in spite of this.
  • Employment in particular continues to overdeliver, with the economy having regained all the jobs lost during Covid.
  • Other variables, namely dwelling approvals and lending may face headwinds ahead.
  • More consequential will be where these levels normalise, as this will indicate what economic activity is sustainable.

Optimism Dominates the Outlook

  • Economic data continues to show a resurgence in economic activity.
  • Q4 GDP growth headlined a run of strong data releases over the month.
  • Upside and downside scenarios for the economy remain disparate, although the downside is looking increasingly unlikely.
  • Optimism must be tempered with the fact the economy remains in a recovery phase.
  • The prospect of an economic expansion over the medium and long term appears very viable, but there is no guarantee high growth rates can be sustained beyond the recovery

RBA Doubles Down as Transition Approaches

  • The economic recovery has continued strongly despite some hiccups with Covid lockdowns.
  • A transition from government led growth back to consumers and businesses will begin in the middle of the year.
  • Plentiful cheap funding from the RBA and high levels of household savings provides an impetus for business and consumer led growth, but it is not guaranteed.
  • Although the outlook is much improved, there is still uncertainty with Covid.

Economic Resurgence Underway

  • Three different vaccines for Covid-19 showed very encouraging results, which means Australia will likely begin rolling out vaccines from the beginning of next year.
  • GDP for Q3 and employment data for October were very strong.
  • Victoria’s re-opening continues to offer an immediate upside to the economy.
  • The RBA made no change to monetary policy and continue referring to an uneven and drawn-out recovery.