K62 Finance

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

Two-year freeze on bush bank closures

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Original article by David Ross
The Australian – Page: 7 : 12-Feb-25

Treasurer Jim Chalmers says the banking sector has agreed to retain all existing branch banks in regional areas until at least mid-2027. The deal to extend the moratorium on branch closures for two years has coincided with a recent move by three of the major banks to renew their deal to provide banking services via Australia Post outlets. Australian Banking Association CEO Anna Bligh notes that despite the growing shift to online banking, many customers in regional areas still prefer to use branches.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKING ASSOCIATION, AUSTRALIA POST

New trends in banking: Digital banks and Macquarie gaining ground in 2024

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Original article by Roy Morgan
Market Research Update – Page: Online : 12-Feb-25

New data on customers’ choices in banking from Roy Morgan’s Single Source survey shows that more Australians turned to newer digital banks, and Macquarie, as their Main Financial Institution (MFI) in 2024. Some 32.8% of Australians considered Commonwealth Bank to be their MFI in 2024. ANZ holds second place at 11.6%, followed by Westpac at 11.4% and NAB at 11.2%. Together, the big four banks make up 67.0% of MFI Share, down 0.6% from 2023. ING, ranked fifth, also saw a slight decline to 4.3%. Newer digital banks like ANZ Plus, ME Bank, Ubank and Up have increased their MFI Share by 0.3% to 2.0%. Macquarie Bank saw a rise of 0.4% to 1.5%, gaining ground across all age groups. Macquarie’s growth in MFI Share coincides with its increase in mortgages and deposits share. These latest banking MFI ratings come from the Roy Morgan Single Source survey, derived from in-depth interviews with over 60,000 Australians each year.

CORPORATES
ROY MORGAN LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ANZ PLUS, ME BANK, UBANK, UP, ING BANK (AUSTRALIA) LIMITED, MACQUARIE BANK LIMITED

NAB cuts rates ahead of Reserve

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Original article by Cameron Micallef
The Australian – Page: 19 : 4-Feb-25

National Australia Bank has pre-empted the Reserve Bank’s upcoming monetary policy decision by reducing some of its mortgage interest rates. NAB has become the first major bank to cut its fixed interest rates in 2025, although Sally Tindall from Canstar expects rival banks to do so as well. Canstar notes that NAB has reduced its fixed rates for owner-occupiers by up to 0.25 percentage points, while fixed interest rates for property investors have been cut by up to 0.3 percentage points. The RBA is widely tipped to reduce the cash rate at its board meeting in mid-February.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD

Risk of mortgage stress up again in December after Reserve Bank again decided not to cut interest rates

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Original article by Roy Morgan
Market Research Update – Page: Online : 30-Jan-25

New research from Roy Morgan shows that 1,595,000 mortgage holders (27.9) were ‘At Risk’ of ‘mortgage stress’ in December 2024. This represents a second straight monthly increase since October but is still 2.4% lower than the June figures prior to the Stage 3 income tax cuts. Modelling by Roy Morgan shows that the number of mortgages ‘At Risk’ will fall by 26,000 in February 2025 to 1,569,000 (27.4% of mortgage holders) if the Reserve Bank drops interest rates to 4.10% at its first board meeting for the year. The number of Australians ‘At Risk’ of mortgage stress has increased by 788,000 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 973,000 (17.4% 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