Regulator panic crashes Aussie yield curve towards recession signal

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Via Bloomie:

Sydney’s plunging house prices are usurping a prolonged wage slump as the key worry for the central bank, with markets now showing more chance of an interest-rate cut than a hike in 2019.

Prices in Australia’s biggest city have tumbled 10 percent and some economists are tipping a similar fall next year. While the central bank isn’t panicking just yet, a 15 percent nationwide drop in prices would cut about A$1 trillion ($718 billion) from the housing stock value. That could deal a major blow to consumption, which props up about 60 percent of the economy.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.