Econosights – wages breakout

Australia’s labour market has held up better than expected, despite the biggest interest rate hiking cycle since the late 1980s. Recently released data on newly lodged Enterprise Bargaining Agreements are showing a spike in wages growth which are increasing concerns that a wages breakout will threaten the inflation outlook.

Oliver’s insights Podcast: Ep#92

Episode #92: Is another rate hike still imminent? In the last week, we saw the RBA leave interest rates on hold for the fourth month in a row, against the backdrop of increasing uncertainty around political developments in the US and geopolitical risks concerning China. AMP’s chief economist Dr. Shane Oliver explores the outlook for interest rates amid the further softening of the jobs market, falling jobs vacancies and rising levels of mortgage stress. Important …

Econosights – rising bond yields

The rise in yields has been driven by several simultaneous factors. These will be explored in this week’s edition of Econosights and look at the impact of rising bond yields.

Oliver’s insights – shares hit another bout of turbulence

Shares have hit turbulence again with worries about inflation, interest rates, recession and, now, problems in US banks. Read more to learn what this means for investors.

Econosights: Three reasons why Australia is more vulnerable to higher rates | AMP Capital

Econosights: Three reasons why Australia is more vulnerable to higher rates Key points Australian consumers are more vulnerable to interest rate rises compared to our global peers because of : 1) higher levels of household debt; 2) a higher share of variable rate mortgages and even those on fixed-loans only fix for a relatively short period of time; and 3) a large share of recently fixed mortgages are due to expire in the second half …

Econosights: Impacts from falling home prices – the wealth effect | AMP Capital

The impacts of interest rate hikes on conusmers are well known: higher interest means that mortgage debt servicing costs will go up which is negative for consumer spending. But, rate hikes are also bad news for home prices.. Econosights: Impacts from falling home prices – the wealth effect Key points Declining home prices will have a negative impact on household wealth as 65% of wealth is related to housing. Lower household wealth is negative for …

2021-22 saw poor investment returns – the bad news and the good | AMP Capital

2021-22 saw poor investment returns – the bad news and the good   Key points 2021-22 was a rough year for investors as high inflation, rising interest rates and recession fears impacted. Shares could still fall further as interest rates continue to rise and recession risks are high. However, inflation pressures are showing some signs of easing which may take pressure off central banks from later this year. Some key things for investors to keep …

Econosights: How are consumers responding to higher interest rates? | AMP Capital

Econosights: How are consumers responding to higher interest rates? Key points Consumers are responding to higher interest rates: housing market indicators are slowing (home price declines have accelerated and auction clearance rates are falling), consumer sentiment is weakening and retail spending is slowing. This is the expected consumer response as interest rates rise. The RBA wants to see slowing economic activity to reduce current inflation and inflation expectations. The concern is around too many rate …

Australia’s Achilles’ heel – high household debt and rising interest rates…it’s not as bad as it looks, but it’s still an issue | AMP Capital

Australia’s Achilles’ heel – high household debt and rising interest rates…it’s not as bad as it looks, but it’s still an issue   Key points Australian household debt has risen dramatically since the 1980s and is high compared to other countries. The rise is not as bad as it looks because it’s been matched by rising wealth and debt servicing problems are low. However, this will likely change as interest rates rise further & if …

Investment markets and key developments over the past week | AMP Capital

Investment markets and key developments over the past week It was a turbulent week for markets after the US Federal Reserve raised interest rates by 0.5% at its May board meeting. This outcome was expected by the market and economists and the market actually rose from comments by Fed Chair Powell that 0.75% rate rises was “not something that the committee is actively considering” which alleviated fears of an extremely aggressive short-term rate hike profile …