Via Damien Boey at Credit Suisse comes the big three:
1. Out-of-cycle rate hikes. The spread of bank bill swap rates to overnight indexed swap rates has come in after financial year-end, but still remains elevated by historical standards. Current spread levels have historically been consistent with margin pressures for banks, and eventually, out-of-cycle rate hikes.
2. Credit tightening. We are only just starting to see the impact of money market tightness, macro-prudential tightening and the Bank Royal Commission on loan approvals and credit growth. Leading indicators point to more weakness in the credit impulse to come.