- The RBA’s normalisation of policy is now complete, so what’s next?
- After 4 consecutive 50 basis point hikes, will the RBA continue or is a change coming?
- Future decisions will be driven by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.
- Market liquidity has tightened and ADIs have started searching for funds again.
- Term deposit and NCD rates have continued to increase, in line with the shift in yield curve with margins showing signs of widening.
- The yield curve has flattened, as the front end of the curve prices in rate hikes.
The Australian Economy
- Good news is bad news and bad news is good news when it comes to the current economic outlook.
- The consumer has remained resilient and continues to drive the economy forward.
- Australia has remained somewhat immunised from the Ukraine War, and if anything, it has enhanced our trade balance through strong exports.
- House prices are falling but the worst is yet to come.