ACCC Tasked (Again) To Look At Mortgage Pricing

Yet another inquiry has been announced into mortgage pricing as the ACCC is tasked to examine the banks failure to pass on in full official interest rate cuts engineered by the central bank. The ACCC’s preliminary report is due by 30 March next year, six months before the final report. Beyond the crocodile tears, there … Read moreACCC Tasked (Again) To Look At Mortgage Pricing

Auction Results 12 Oct 2019

Domain released their preliminary results for today. Volumes were higher this week, after a lower set last time around, thanks to the long weekend. Overall clearance rates were higher than last year, and listing volumes a little higher this year. Canberra listed 66 auctions, reported 55 and sold 42 with 4 withdrawn and 13 passed … Read moreAuction Results 12 Oct 2019

Light At The End Of The Tunnel, Or An Approaching Train? – The Property Imperative Weekly 12 Oct 2019

The latest edition of our weekly finance and property news digest with a distinctively Australian flavour to 12th October 2019. Contents 0:30 Introduction 1:20 US China Trade 3:10 US Markets 5:20 Fed Market Operations 10:10 Canada 10:50 Brexit and UK Markets 13:20 EU 14:00 China 15:05 Australian Section 15:10 Aussie Banks Under Pressure 18:40 Economic … Read moreLight At The End Of The Tunnel, Or An Approaching Train? – The Property Imperative Weekly 12 Oct 2019

RBA On ‘Emergency Liquidity Injections’

The RBA released “Research Discussion Paper – RDP 2019-10 Emergency Liquidity Injections” by Nicholas Garvin. Here is the non-technical summary. Understanding liquidity crises has long been, and will probably long be, an important objective for economic policymakers. Liquidity risk is inherent to banking systems because banks fund long-term assets (like mortgages) with short-term and at-call … Read moreRBA On ‘Emergency Liquidity Injections’

Household Financial Confidence Crushed Some More

In our latest release to September 2019, the DFA Household Financial Confidence Index fell again, having move sideways more recently. In essence households are simply reflecting that rate cuts, a lower dollar and the international bad news from Trump’s Trade Wars, Brexit and Hong Kong are all making them more concerned, and less willing or … Read moreHousehold Financial Confidence Crushed Some More

GFC Lessons For Banks Remain Unlearned

On 7 October, the European Central Bank (ECB) published its liquidity stress test results for 103 euro area banks. ECB’s increased focus on stressed liquidity is credit positive for these banks. As the liquidity coverage ratio (LCR) has a very short 30-day horizon, ECB looking at liquidity stresses lasting six months provides a much more … Read moreGFC Lessons For Banks Remain Unlearned

Housing Starts Still Well Down

The ABS today released building activity data for the June quarter of 2019 and for August 2019. The trend estimate for total dwellings approved fell 3.9% in August. The seasonally adjusted estimate for total dwellings approved fell 1.1% in August. The value of residential building fell 2.9% and has fallen for six months. The trend … Read moreHousing Starts Still Well Down

Nine in 10 Global Funds Have Zero Exposure to Australian Banks

Australian banks are having their toughest time attracting investors, according to new analysis from Copley Fund Research, which monitors flows in funds with $1.2 trillion under management. An exodus by fund managers has left 91% of the 430 funds in Copley’s global analysis with zero exposure to the sector. That’s the lowest take-up on record. On average, allocations to the … Read moreNine in 10 Global Funds Have Zero Exposure to Australian Banks

ANZ Takes Another $559 million Remediation Bill Hit

ANZ has announced that its second half 2019 (2H19) cash profit will be impaired by a charge of $559 million (after-tax) as a result of increased provisions for customer related remediation. The costs include a $405 million after-tax ($485 million before tax) charge within continuing operations, which the bank said largely related to product reviews … Read moreANZ Takes Another $559 million Remediation Bill Hit

Volatility Rules – The Property Imperative Weekly 5th October 2019

The latest edition of our weekly finance and property news digest with a distinctively Australian flavour. Contents: 0:28 Introduction 1:04 Global Growth Slowing 3:38 US Markets 9:30 Euro Zone 11:15 UK and Brexit 12:38 Metro Bank 14:30 Australian Segment 14:40 Economics 15:21 Property 22:15 Bank Competition 25:15 ASIC and CBA 26:30 Australian Markets 27:30 Outlook … Read moreVolatility Rules – The Property Imperative Weekly 5th October 2019

Taking down the Killer Dollar

Saxo Bank, the online trading and investment specialist, has today published its Q4 2019 Quarterly Outlook for global markets, including trading ideas covering equities, FX, commodities, and bonds, as well as a range of central macro themes impacting client portfolios. “2019 will most likely be remembered as the beginning of the end of the biggest … Read moreTaking down the Killer Dollar

August Retail Disappoints – Unsurprisingly

The ABS released their August 2019 retail figures today, and the data confirms the slowing economy, and that despite 2 rate cuts and tax refunds, households are unwilling or unable to spend. This is consistent with our surveys data which shows any free cash is going towards paying down debt, a sign of reduced levels … Read moreAugust Retail Disappoints – Unsurprisingly

Rate Cuts Are Offsetting Mortgage Stress Rises

The latest data released today by DFA is our mortgage stress analysis to the end of September 2019. This is derived from our rolling 52,000 household surveys. Mortgage stress examines the cash flows of households, relative to their mortgage repayments. If there is a deficit, households are in stress, and if there is a significant … Read moreRate Cuts Are Offsetting Mortgage Stress Rises

NAB To Drop 2H19 Cash Earnings By ~$1,123 Million

National Australia Bank Ltd (NAB) announced additional charges of $1,180 million after tax ($1,683 million before tax) relating to increased provisions for customer-related remediation and a change to the application of the software capitalisation policy. This is expected to reduce 2H19 cash earnings by an estimated $1,123 million after tax and earnings from discontinued operations … Read moreNAB To Drop 2H19 Cash Earnings By ~$1,123 Million

NZ Reserve Bank Seeks Views on Expanded Stewardship Role For Cash

Cash system participants and the wider public are being asked for their views about the Reserve Bank of New Zealand taking a more active role in the cash system. A consultation paper has been released today as part of the Bank’s ongoing Future of Cash – Te Moni Anamata programme which is considering the implications … Read moreNZ Reserve Bank Seeks Views on Expanded Stewardship Role For Cash

Population Growth a Key Factor for Australia’s Economic Expansion

Interesting article from The St. Louis Fed “On The Economy” blog titled “Has Australia Really Had a 28-Year Expansion?” Should we use Australia as a benchmark when thinking about possible duration of expansions? They conclude we have to take it with a grain of salt because looking at just GDP growth doesn’t paint the whole … Read morePopulation Growth a Key Factor for Australia’s Economic Expansion

CBA Withholds Some Of The Rate Cut Margin

Commonwealth Bank has responded to the Reserve Bank of Australia’s cash rate decision by reducing home loan interest rates. New Standard Variable Rates   Owner Occupied Principal and Interest Standard Variable Rate home loans reduced by 0.13% per annum (p.a) to 4.80% p.a. Investor Principal and Interest Standard Variable Rate home loans reduced by 0.13% … Read moreCBA Withholds Some Of The Rate Cut Margin

Residential Dwelling Approvals Fall Again

The ABS reported that the number of dwellings approved fell 3.9 per cent in August 2019, in trend terms, and has fallen for 21 months. “The fall continues to be driven by private dwellings excluding houses, which decreased by 9.2 per cent in August,” said Daniel Rossi, Director of Construction Statistics at the ABS. “Private … Read moreResidential Dwelling Approvals Fall Again

RBA Cuts Yet Again!

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 0.75 per cent. While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the … Read moreRBA Cuts Yet Again!

Westpac Revises Broker Remuneration Policy

Westpac Group has announced that it will remove the claim process for upfront commissions paid on post-settlement drawdowns on broker-originated home loans, via InvestorDaily.   For all subsequent upfront commissions payable from 1 January 2020, brokers and third-party introducers will automatically receive remuneration. Westpac revealed that subsequent upfront commission will remain payable for each eligible … Read moreWestpac Revises Broker Remuneration Policy

The Credit Impulse Hiccups In August 2019

Both the RBA and APRA released their respective credit aggregates to end August today. And its not running to script, despite the rate cuts, some stronger buying signs in some housing markets (but on low, low volumes), and increased competition for loans. Overall credit growth rates continue to decline. The RBA data over the rolling … Read moreThe Credit Impulse Hiccups In August 2019

German Bank Stress Test Hit By Low Interest Rates

Moody says that on 23 September, German bank regulator Bundesanstalt fuer Finanzdienstleistungsaufsicht (BaFin) and the German central bank, the Deutsche Bundesbank, published the results of their biennial stress test applied to 1,412 small and midsize German banks that fall under BaFin’s direct oversight. The tested banks represent 38% of German banking system assets. The stress … Read moreGerman Bank Stress Test Hit By Low Interest Rates

Westpac tipped to cut dividend by 12%

Analysts believe the major banks will be forced to reduce dividend payments amid slower growth, margin squeeze and significant remediation costs, via InvestorDaily. In a research note published on Wednesday (25 September), Morningstar analyst Nathan Zaia forecast Westpac’s 2020 dividend will be reduced by 12 per cent to $1.66 from $1.88.  The analyst believes that … Read moreWestpac tipped to cut dividend by 12%

Yes, But What About Deposit Insurance?

Following on from our show on Deposit Bail-In, we discuss the Deposit Insurance arrangements in Australian and New Zealand. What happens in a “gone” situation? https://www.rba.gov.au/publications/bulletin/2011/dec/pdf/bu-1211-5.pdf https://www.fcs.gov.au/are-your-savings-protected https://www.moneysmart.gov.au/managing-your-money/banking https://treasury.govt.nz/publications/resource/questions-and-answers-phase-2-review-reserve-bank-act-second-round-consultation Please follow and like us: