K62 Finance

Risk of mortgage stress unchanged in April, but set to fall in May after the Reserve Bank cuts interest rates

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-May-25

New research from Roy Morgan shows that 1,429,000 mortgage holders (26.5%) were ‘At Risk’ of ‘mortgage stress’ in April 2025, unchanged from a month earlier. These figures relate to the period before last week’s interest rate cut, which is projected to reduce mortgage stress by 13,000 in May to 1,416,000 (26.3%). The number of Australians ‘At Risk’ of mortgage stress has increased by 622,000 since May 2022, when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 955,000 (18.0% of mortgage holders), which is clearly above the long-term average over the last 10 years of 14.7%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Rate cuts still on the way after tariff pause

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Original article by Cecile Lefort
The Australian Financial Review – Page: 29 : 14-May-25

IFM Investors’ chief economist Alex Joiner has described the 90-day tariff pause agreed to by the US and China as a "small step forward". However, he cautions that the significant tariffs that remain in place during the temporary truce in the trade war will still be a major challenge for US households, businesses and the broader economy. Meanwhile, financial markets expect the US Federal Reserve to reduce official interest rates by 25 basis points in September; the Reserve Bank of Australia is in turn tipped to cut the cash rate three times before the end of 2025, by 85 basis points in total.

CORPORATES
IFM INVESTORS PTY LTD, UMOW LAI & ASSOCIATES PTY LTD, RESERVE BANK OF AUSTRALIA

‘Locked in’: Westpac’s big interest rate cut call

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Original article by Cameron Micallef
The Australian – Page: 23 : 29-Apr-25

Westpac’s chief economist Luci Ellis believes that the Reserve Bank of Australia is certain to reduce the cash rate by 25 basis points in May. She says a rate cut is likely even if inflation data for the March quarter is slightly disappointing. Ellis does not expect the RBA to reduce the cash rate by 50 basis points in May, although she says there is the potential for a cut of 35 basis points, which would reduce the cash rate to 3.75 per cent. Ellis also expects rate cuts in both August and November.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

Risk of mortgage stress dropped for a second straight month in March after the Reserve Bank cut interest rates

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Original article by Roy Morgan
Market Research Update – Page: Online : 24-Apr-25

New research from Roy Morgan shows that 1,451,000 mortgage holders (26.5%) were ‘At Risk’ of ‘mortgage stress’ in March 2025. The share of mortgage holders ‘At Risk’ of ‘mortgage stress’ in March is the lowest since June 2023, when official interest rates were also at the current level of 4.1% before a final increase later that year to a 12-year high of 4.35%. The number of Australians ‘At Risk’ of mortgage stress has increased by 644,000 since May 2022, when the RBA began its cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 990,000 (18.5% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.7%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Just four economists expect the RBA to stay pat on rates

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Original article by Cecile Lefort
The Australian Financial Review – Page: 23 : 16-Apr-25

Financial markets have fully priced in a 25 basis point interest rate cut at the Reserve Bank of Australia’s monetary policy meeting in May, and a 34 per cent chance of a 50 basis point cut. The general consensus of economists is also that the cash rate will be eased in May; most economists had previously expected rates to remain unchanged in May, prior to the global financial market turmoil in response to the Trump administration’s tariffs war.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Goldman Sachs boss says chances of US recession have increased after Trump tariffs

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Original article by Kalyeena Makortoff
The Guardian – Page: Online : 15-Apr-25

Goldman Sachs CEO David Solomon has told analysts during an earnings call to discuss its first quarter results that the bank thinks Donald Trump’s tariffs have increased the chances of a US recession. He said that the growing uncertainty over the fallout of US tariffs was making it harder for Goldman Sachs’ clients to make important business decisions, and that an escalation in the trade war poses "material risks" for US and global growth. Goldman Sachs’ first quarter results saw it record a pre-tax profit of $US5.6 billion, up eight per cent

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How the bond market forced Trump to retreat

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 20 : 11-Apr-25

A dramatic sell-off of US treasuries led to US President Donald Trump announcing a 90-day reprieve of reciprocal tariffs on all countries bar China, rather than the recent sell-off on Wall Street that some have suggested. The sell-off of US treasuries was attributed to global investors such as China and Japan losing faith in the US, and was compounded by hedge funds unwinding what is known as the ‘basis trade’. Despite Trump’s decision to pause his reciprocal tariffs, AMP chief economist Shane Oliver says there could still be a recession in the US, with Oliver saying the significant damage that Trump has done to confidence in the US will be hard to recover.

CORPORATES
AMP LIMITED – ASX AMP

Traders temper rate bets after RBA holds

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Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 2-Apr-25

Bond market traders are now pricing in a 67 per cent chance tha the Reserve Bank of Australia will reduce the cash rate in May, after its widely anticipated decision to leave rates unchanged on Tuesday. Money markets had put the odds of a rate cut in May at 77 per cent prior to the RBA’s latest two-day monetary policy meeting. However, market participants have still fully priced an interest rate cut at the RBA’s next meeting in July. Christian Bayliss from Fortlake Asset Management says the quarterly CPI data to be released in late April will be crucial to the decision on interest rates in May.

CORPORATES
RESERVE BANK OF AUSTRALIA, FORTLAKE ASSET MANAGEMENT LIMITED

Risk of mortgage stress dropped in February, after the Reserve Bank cut interest rates for the first time since 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Mar-25

New research from Roy Morgan shows that 1,549,000 mortgage holders (27.7%) were ‘At Risk’ of ‘mortgage stress’ in February 2025. The share of mortgage holders ‘At Risk’ of ‘mortgage stress’ is the lowest since November 2024. After the introduction of the Stage 3 tax cuts in July 2024 the share of mortgage holders ‘At Risk’ fell for four straight months until October, but it then began to increase for the next three months until the Reserve Bank’s interest rate cut in mid-February. The number of Australians ‘At Risk’ of mortgage stress has increased by 742,000 since May 2022 when the RBA began the cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,066,000 (19.6% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.7%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Risk of mortgage stress increased in January, before the Reserve Bank cut interest rates for the first time since 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 5-Mar-25

New research from Roy Morgan shows that 1,633,000 mortgage holders (28.9%) were ‘At Risk’ of ‘mortgage stress’ in January 2025. This represents a third straight monthly increase since October, but is still 1.4% lower than the June figures prior to the Stage 3 tax cuts. Modelling by Roy Morgan shows that the number of mortgage holders considered to be ‘At Risk’ will fall by 26,000 in February to 1,607,000 (28.4% of mortgage holders) following the Reserve Bank’s interest rate cut; the number of mortgages ‘At Risk’ is set to drop further if the Reserve Bank cuts interest rates again in April. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,043,000 (18.9% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.6%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA