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RBA terrified of household debt

Via Westpac: The minutes of the Reserve Bank Board’s July monetary policy meeting provide some significant additional colour around the Bank’s current thinking. The main points of interest are: 1) a slightly more tentative tone around the outlook; 2) the reinstated line that the next cash rate move “would more likely be an increase than

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57

Mortgage hikes to crunch Aussie borrowers

Interest rate comparison website, RateCity, has estimated that Australian mortgage holders are facing sizeable increases in repayments on the back of out-of-cycle rate rises by lenders. From The Australian:  …mortgage holders with loans of $500,000 would be hit with a bill for an extra $358 each year if their lender increased rates by 10 basis

14

Sydney becomes both a “buyer’s and renter’s” market

By Leith van Onselen SQM Research has released its rental vacancy series for June, which revealed a 0.2% lift in the national vacancy rate over the month but a 0.2% decline over the year: Over the year, decreases in vacancies were recorded in Adelaide (-0.3%), Perth (-1.3%), Brisbane (-0.6%) and Canberra (-0.3%), whereas increases were

22

Links 18 July 2018

Global Macro / Markets / Investing: Jeff Bezos Becomes the Richest Man in Modern History, Topping $150 Billion – Bloomberg The Flattening Yield Curve – Medium Coinbase Says It Has Green Light to List Coins Deemed Securities – Bloomberg Netflix Plunges After Slowdown Threatens Highflier Status – Bloomberg Tech stocks contributed 98% of the S&P

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Macro Afternoon

As Trump trounces Europe and supports Russian hegemony, markets continue to run the concern thread over trade tensions, while pushing the hope barrow on stellar US corporate earnings to keep the whole risk edifice afloat. The Aussie and Kiwi dollar advanced against the USD on RBA optimism and higher inflation levels in New Zealand. The Shanghai

12

Auckland house prices rebounded in June

By Leith van Onselen The REINZ has released its house price data for June, which revealed a 0.9% seasonally adjusted monthly rise in the national median house price, with prices also up 5.2% year-on-year: Outside of Auckland, seasonally adjusted house prices rose by 1.3% in June, with prices up 6.6% year-on-year. Looking at the major

25

Sydney’s auction clearance rate to plunge into 30’s

By Leith van Onselen If you thought Sydney’s auction clearance rate was bad now, it’s going to get much worse in spring, according to SQM Research’s Louis Christopher, with annual price falls for Sydney “of at least 5%”: “It is going to be a very tough spring for sellers,” [Christopher] said. “Seasonally, we see more

13

Retail super funds’ decade of rorting revealed

By Leith van Onselen Audited performance data provided to the Australian Prudential Regulation Authority (APRA) has revealed that the biggest superannuation fund operated by each of Australia’s four major banks, along with the largest super funds operated by AMP and IOOF, yielded total average annual returns of 2.1% to 3.1% cent in the decade to

8

Labor attacks Coalition’s ‘yes men’ stacking of public service

By Leith van Onselen On Friday it was revealed that the Turnbull Government had appointed former Coalition insiders into key economic roles within the Australian public service, namely: appointment of former chief of staff to both Treasurers Peter Costello and Scott Morrison, Philip Gaetjens, to the secretary of the Australian Treasury; appointment of former chief of

5

As your pay falls, CEOs make like bandits

By Leith van Onselen I have always found it irritating when interest groups like the Business Council of Australia complain about Australia’s uncompetitive wages and the need to cut penalty rates or the minimum wage, as well as slash company taxes, but conveniently refuse to address the egregious blow-out in CEO and senior management pay.

6

AEMO confirms the end of coal

Via Reneweconomy: The Australian Energy Market Operator, in a ground-breaking study, has confirmed that the cheapest and smartest replacement for the country’s ageing coal capacity will be in solar, wind and storage technologies. In the long awaited release of its Integrated System Plan, AEMO says much of Australia’s coal capacity will retired by 2040 because

12

Essential: Labor’s lead narrows

Via The Guardian: A substantial majority of voters want an inquiry into power prices and anti-competitive conduct by Australia’s energy retailers, and there is also community support for returning energy assets to public ownership, according to the latest Guardian Essential poll. The survey of 1,014 respondents also suggests the contest between the major parties could be

9

Little banks hike mortgage rates

Via Australian Broker: More banks have increased interest rates as the pressure of increased funding costs continues to mount. Teachers Mutual Bank Limited (TMBL) announced new rates yesterday. TMBL includes three banks: Teachers Mutual Bank, UniBank and Firefighters Mutual Bank. TMBL announced changes to its fixed rates for new customers to the group’s brands. TMBL

19

Give Australians a population plebiscite, not Senate review

By Leith van Onselen Following Liberal senator Dean Smith’s call yesterday for a wide-ranging Senate inquiry into Australia’s population policy, Prime Minister Malcolm Turnbull hosed the idea, claiming the immigration system is delivering what’s needed: Malcolm Turnbull believes Australia’s immigration system is in great shape as he hosed down calls for a review of population policy… “We

57

Brokers “shocked” as mortgages disappear

Via the AFR: Westpac is set to rock the increasingly nervous property market by withdrawing new loan offers to self-managed superannuation funds looking to invest in property. …The move has shocked mortgage brokers and financial advisers, who act as intermediaries between borrowers and the banks, but complements a change in lending strategy the banks have

6

Chinese visitor arrivals hit record high

By Leith van Onselen The Australian Bureau of Statistics yesterday released its overseas short-term arrivals and departures figures for May, which continued to show a trend rise in the number of inbound visitors, with Chinese arrivals hitting an all-time high. The number of short-term visitor arrivals fell a seasonal 10.4% in May in original terms,