Australian interest rates

In secret, via the AFR: National Australia Bank is raising rates again, its fifth change in rates, policies and marketing in a month.

Fro Morgan Stanley: The RBA’s Rock and a Hard Place; On Hold Until 2019 The RBA is stuck at 1.50%, unable to cut given housing risks, yet unable to follow the Fed’s hikes given labour market weakness.

Australian bonds yields remain very soft today: Despite a solid move upwards in US yields after its jobs report.

From Deutsche: Our pick for Q1-17 headline CPI is for a 0.6%qoq/2.2%yoy outturn. We expect the average of the core measures to print at 0.4%qoq/1.8%yoy. We see headline CPI printing at 0.6%qoq in Q1-17 (due 26 April), and for the average of the core measures to print at 0.4%qoq.

Drop your linen and start your grin’n, the Great Australian Property Crash has begun.

Via the AFR comes the usually excellent Alex Joiner: “We’ve brought forward all the housing consumption we can – that’s reflected in debt,” said IFM Investors chief economist Alex Joiner.

Leith and I have been debating internally if Australia is on the verge of a psychological break this morning.

From the Bubble Managers: At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The Australian operates in bizarro world today: Australia’s growing dependence on borrowing to buy and build homes has prompted warnings the economy faces a serious shock, increasing the pressure on regulators to act carefully before further tightening the screws on the fragile property market.

From the pointless RBA shadow: Australia’s major banks raised mortgage interest rates, citing an increase in global financing costs.

Melbourne Institute monthly inflation still weak with month on month in at 0.1% and year on year at 2.2%.

From Moody’s: Moody’s Investors Service says that delinquencies for Australian auto loan asset-backed securities (ABS) and residential mortgage-backed securities (RMBS) increased in January 2017 when compared with December 2016.

The absolute madness of the energy crisis is on display today as Morgan Stanley mulls inflation pass-through to food: Energy costs are escalating rapidly in Australia which we think will lead to cost pressure and potentially a return of food inflation.

Shame Oliver sees house price falls, at The Australian: Dr Oliver said it was no surprise to see APRA increase its focus on the investor lending market, but suggested the moves had come too late.

From Louis Christopher at the AFR: “It’s weak.

The Reserve Bank Board meets next week.

From S&P: The number of delinquent housing loans underlying Australian prime residential mortgage-backed securities (RMBS) increased in January to 1.29% from 1.15% in December, according to a recent report by S&P Global Ratings.

Via Marty North: Genworth released their notice of the 2017 Annual General Meeting today, to be held on 11 May 2017.

New narrows today for the carry trade into Aussie dollars as the yield spread on the two year bond hit 45bps overnight, it’s narrowest since April 2001: The last time the spread was this narrow, the Aussie dollar was trading at 49 cents.

Get on with it APRA and make it count: 5% investor lending cap and higher investors risk weights.