FINSOC Weekly Wraps Vol. 33
The RBA is inline for its biggest overhaul in three decades
• On Thursday, Treasurer Jim Chalmers announced his support for the 51 recommendations put forward in the RBA.
• The centre of the changes in the review includes splitting the RBA’s current board in two – one for overseeing governance and one for overseeing monetary policy.
• The monetary board will compromise nine members, including 6 externally appointed economic specialists. This decision was a result of the review finding there needs to be “a health counterbalance to the influence of internal members”.
FINSOC Weekly Wraps Vol. 32
Sydney and Melbourne property markets bottom out, showing signs of recovery
• According to key property data analysts, national home values have decreased by 9.4% peak-to-trough, attributing to the increase in consumer confidence and lower interest rates.
• More importantly, record immigration levels and high population growth have been increasing housing demand, thus attracting more investors into the market.
FINSOC Weekly Wraps Vol. 31
RBA puts a paise on rate rises – what can we expect next
• After 10 consecutive rate rises cumulatively amounting to a 350 basis point increase, the RBA left the target cash rate unchanged at 3.60%.
• The pause on rate hikes comes down to the RBA needing “more time to assess the state of the economy” – Governor Philip Lowe.
• 800,000 Australians who took out cheap fixed-rate loans during the pandemic will transition to variable rates at the end of the year.
FINSOC Weekly Wraps Vol. 30
For the first time in nearly three years, the NASDAQ 100 enters bull market
• The rise in the market was helped by a combination of traders piling into technology stocks and a reduction of angst surrounding recent bank turbulence.
• Specifically, big rallies in megacaps Apple, Microsoft and Amazon, helped the push into a bullish market.
FINSOC Weekly Wraps Vol. 29
UBS offers to bail out Credit Suisse amidst global financial turmoil
• Swiss banking giant UBS has agreed to purchase Credit Suisse in an all-share deal valued at $4.8 billion.
• The acquisition includes government guarantees and liquidity provisions as well.
• It has been agreed that the Swiss National Bank will be offering UBS liquidity assistance of 100 billion francs while the government will guarantee potential losses of 9 billion francs.
FINSOC Weekly Wraps Vol. 28
The RBA raises interest rates to an 11-year high, opens the door to a pause
• The RBA has raised interest rates for the 10th consecutive meeting, taking the cash rate target to 3.6%.
• RateCity has stated that the latest increase would be a $77 a month increase to repayments on a $500,000 home loan and double that on a $1 million mortgage.
• Borrowers with $500,000 mortgages will soon be facing monthly mortgage repayments near $1k larger than a year ago.
FINSOC Weekly Wraps Vol. 27
UK grocery price inflation hits record high as more stores impose rationing
• A measure of UK grocery price inflation soars as shop price inflation rose to a fresh high of 8.4% in February, up from 8% in January – driven by new highs in the costs of food.
• Fresh food prices rose by 16.3% amid shortages of staples such as tomatoes and broccoli, due to suboptimal weather conditions in southern Spain and northern Africa.
FINSOC Weekly Wraps Vol. 26
US Markets are set to increase their interest rates further into 2023.
• Markets now view it as probably that the Fed Funds rate will reach 5.25% to 5.50% in 2023.
• The Fed is now expected to hike rates at upcoming meetings in March, May and June according to interest rate futures.
• This is largely due to the idea that despite being past peak inflation rates, certain prices will continue to rise, thus more work needs to be done.
FINSOC Weekly Wraps Vol. 25
Unemployment rate increased to 3.7% in January
• The unemployment rate has jumped to 3.7% from 3.5% in January due to more than 11,500 people losing work, according to data released by the ABS last Thursday.
• The sharp drop in January was a result of a loss in 43,300 full-time workers, which was only partly offset by a 31,800 rise in part-time employment.
FINSOC Weekly Wraps Vol. 24
RBA raises rates, and expect further increases will be needed
• In the first Tuesday board meeting of 2023, the RBA has raised the official cash rate by 25 basis points to 3.35%, the highest level in over a decade.
• RBA governor Phillip Lowe affirms expectations of further rate rises and says “the Board expects that further increases in interest rates will be needed over the months ahead” to stabilise high inflation.