K62 Finance

Mortgage stress down in May and set to fall further in the months ahead after the Stage 3 tax cuts begin

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Jun-24

New research from Roy Morgan shows that 1,514,000 mortgage holders (29.7%) were ‘At Risk’ of ‘mortgage stress’ in the three months to May 2024. This represents a decrease of 46,000 (-1.1%) on a month earlier and is now the lowest level of mortgage stress reached so far this year. The RBA left interest rates on hold during their June board meeting and there is no RBA board meeting to decide upon interest rates during the month of July. The level of mortgage holders who are ‘At Risk’ of ‘mortgage stress’ in May is the lowest rate since July 2023 (29.2%), and the first time this year the rate has dropped below 30% of mortgage holders. The lower level of mortgage stress in recent months has been driven by rising household incomes, which has reduced the financial pressure on some mortgage holders. However, the number of Australians ‘At Risk’ of mortgage stress has increased by 707,000 since May 2022 when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered ‘Extremely At Risk’ of mortgage stress is now numbered at 976,000 (19.9% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.4%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

Slowing economy puts RBA rate cut on cards: Minack

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 25 : 13-Jun-24

Market strategist Gerard Minack says monetary policy in Australia is "very restrictive" at present, noting that official interest rates are still lower than comparable countries. Minack addressed the Morgan Stanley Australia summit on Wednesday, stating that he expects the Reserve Bank to reduce the cash rate later in 2024 or in early 2025. Meanwhile, Morgan Stanley economist Chris Read said the central bank could increase the cash rate if inflation rises again. Market traders have fully priced in the cash rate remaining on hold until the end of 2024, and a rate cut in May 2025.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA

RBA rate rise still likely even after wage review

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Original article by Cecile Lefort
The Australian Financial Review – Page: 27 : 4-Jun-24

Su-Lin Ong from RBC Capital Markets says the Reserve Bank of Australia will most likely have welcomed the Fair Work Commission’s decision to limit the minimum wage increase to 3.75 per cent on Monday. Financial markets had been concerned that the minimum wage would be increased by at least four per cent, while economists had warned that a rise of this size would have complicated the RBA’s efforts to restore inflation to its target range. Bond traders have now priced in a 14 per cent chance of an interest rate rise by the end of 2024, while they have fully priced in a rate cut by August 2025.

CORPORATES
RBC CAPITAL MARKETS, AUSTRALIA. FAIR WORK COMMISSION, RESERVE BANK OF AUSTRALIA

‘Simply walking away’: Banks face branch closure crackdown as Senate probe exposes failures

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Original article by Matthew Elmas
The New Daily – Page: Online : 28-May-24

The Senate committee on regional affairs has released a report into bank closures in regional Australia, with the committee making a number of recommendations aimed at protecting regional communities from further branch closures. They include that access to cash should be considered an essential service and that the federal government should consider a new publicly owned bank that could service regional communities indefinitely, with Council of the Ageing chief executive Patricia Sparrow urging the government to "immediately action" the essential services call

CORPORATES
COUNCIL ON THE AGEING

Mortgage stress increased to 30.8% of mortgage holders in April but remains below highs reached earlier in 2024

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-May-24

New research from Roy Morgan shows that 1,560,000 mortgage holders (30.8%) were ‘At Risk’ of ‘mortgage stress’ in the three months to April 2024. This represents an increase of 29,000 (+0.5%) on a month earlier, but remains below the highs reached earlier in 2024. There was no RBA board meeting on interest rates during the month of April. The proportion of mortgage holders now ‘At Risk’ is well below the record high of 35.6% reached during the Global Financial Crisis because of the larger size of the Australian mortgage market today. However, the number of Australians ‘At Risk’ of mortgage stress has increased by 753,000 since May 2022 when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered ‘Extremely At Risk’ of mortgage stress is now numbered at 994,000 (20.2% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.4%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

ANZ Roy Morgan Financial Wellbeing Indicator March 2024

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-May-24

Financial wellbeing is the extent to which someone is able to meet all of their current commitments and needs comfortably, and has the financial resilience to maintain this in the future. The ANZ Roy Morgan Financial Wellbeing Indicator is reported as a 12-month moving average, with regular updates showing the changes in aspects of financial wellbeing across locations and for a range of segments in the community. The FWBI is a useful measure of how people are faring in their financial lives in Australia over time. This update examines how financial wellbeing changed in the December quarter of 2023 and year-on-year. While the financial wellbeing of Australians declined further in the December 2023 quarter, the quarterly decline was the smallest since March 2022. Indeed, the spot results show some improvement since June 2023 coinciding with the RBA (November excepted) leaving interest rates on hold during the September and December 2023 quarters. Download the full report.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Bendigo Bank, Bankwest & ING home loan customers are the most satisfied with their bank after two years of interest rate rises

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-May-24

New financial data from Roy Morgan’s Single Source shows that Bendigo Bank has topped the banking customer satisfaction ratings among home loan customers in early 2024. Bendigo Bank’s home loan customer satisfaction is a market leading 87.7% in March. In second place was Bankwest with customer satisfaction among home loan customers at 86.6%. Filling out the top four banks are ING on 84.6% and Macquarie on 79.9%. The latest data covers the six months to March 2024, and overall home loan customer satisfaction amongst Australia’s top banks collectively was at 74.9% during this period. This represents a collective decrease of 1.1% points from a year ago. CBA had the highest home loan customer satisfaction among the big four banks, with a rating of 76.1% in March. Average home loan customer satisfaction with the big four banks as a group was 72.7%.

CORPORATES
ROY MORGAN LIMITED, BENDIGO BANK, BANKWEST, ING BANK (AUSTRALIA) LIMITED, MACQUARIE BANK LIMITED – ASX MBL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Rate rise still priced in despite Chalmers’ forecast

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Original article by Alex Gluyas
The Australian Financial Review – Page: 28 : 14-May-24

AMP’s chief economist Shane Oliver is amongst those who have questioned the federal government’s forecast that the headline inflation rate will fall to 3.5 per cent by the end of June. He notes that it is uncertain as to how cost-of-living relief in the budget will impact on inflation, given that the financial year ends in about six weeks. Paul Bloxham of HSBC in turn says the budget is likely to boost the Reserve Bank’s preferred measure of core inflation, which is likely to rule out an interest rate cut in 2024. Meanwhile, futures traders still expect the central bank to increase the cash rate this year.

CORPORATES
AMP LIMITED – ASX AMP, HSBC HOLDINGS PLC, RESERVE BANK OF AUSTRALIA

CBA tips one rate cut this year as fears of a rise ease

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Original article by Cecile Lefort, Joshua Peach
The Australian Financial Review – Page: 25 : 1-May-24

Financial market traders have now priced in a 25 per cent chance that the Reserve Bank of Australia will increase the cash rate by September; this compares with a 47 per cent chance on Monday. Meanwhile, the Commonwealth Bank now expects the cash rate to be reduced by 25 basis points to 4.1 per cent in November, having previously forecast three interest rate cuts in 2024. It also anticipates four interest rate cuts in 2025. The revised interest rate outlook follows last week’s release of data showing that inflation grew by a higher than expected one per cent for the March quarter; however, it preceded the release of data showing a decline in retail sales in March.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

RBA’s next move will still be a cut: investors

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Original article by Cecile Lefort
The Australian Financial Review – Page: 29 : 30-Apr-24

The US Federal Reserve is now widely tipped to deliver its first interest rate cut in December, after the latest inflation data dampened expectations of a rate cut in June. Meanwhile, bond traders have now priced in a 50 per cent chance that the Reserve Bank of Australia will increase the cash rate to 4.6 per cent by September. Both central banks are expected to leave interest rates unchanged at their upcoming board meetings. Kapstream Capital portfolio manager Kris Bernie still expects the RBA to reduce the cash rate, although he says this is now likely to be delayed until 2025.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, KAPSTREAM CAPITAL PTY LTD