RBA Recap

• The RBA lifted the cash rate another 25bp to 3.10% at the December meeting.
• There was little change in the accompanying statement with only a few insights into any change of narrative in the new year.
• Looking back over the last 12 months and monetary policy is a long way from where, economists, market commentators and market pricing were suggesting.
• Will we see a similar a similar phenomenon over the year ahead?

Market Dynamics

• Competition for funding heated up heading into the holiday break.
• Smaller ADIs are having to go above and beyond to sure up funding.
• The shorter end of the Curve is seeing very rare margins and rates. But how long will the squeeze last?

The Australian Economy

• The Australian economy experienced a robust resurgence over 2022.
• Activity accelerated as restrictions eased back and a more normal operating environment resumed.
• Data over the last month suggests that the speed of expansion has peaks and activity is under pressure from rising rates and inflation.
• What can we expect from the economy going into the new year?

Please click here to download the December Monthly