Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Another from our Spotlight series.
Mitcham is a suburb of Melbourne, Victoria, Australia, 20 km east from Melbourne’s Central Business District. Its local government area is the City of Whitehorse. At the 2016 Census, Mitcham had a population of 16,148.
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Josh Frydenberg’s March 29 budget — his fourth as Treasurer — is expected to reveal a big deficit for 2022-23. In December, it was estimated it would be just under $99 billion, but the updated figure is expected to have tumbled by tens of billions of dollars. That said, we still have a structural deficit of close to $1 trillion dollars, and the costs of that debt will rise, as interest rates rise, so that’s a problem. And the structural deficit will continue, that’s to large spending on programmes like NDIS, Centrelink Payments, Medicare, and Defence.
And although the current year deficit will fall from $99 billion as predicted, it is worth remembering that to date the Government has promised to spend some additional $70 billion over a number of years on a range of programmes, some with frankly dodgy motivations (some might think pork-barrelling was a better term).
There will be some short-term relief, to assist with the cost-of living pressures, which according to recent surveys are driving household confidence lower. But the whole exercise is political.
The Government will of course go on talking about the $250 billion savings households are sitting on, thanks to COVID and Government payments over the past couple of years, but as I have shown before this is not equally spread across the population and taking in general terms about “household balance sheets are in good shape” belays the truth that averages mask, and many households are really up against it as costs of living rise, and with the prospect of higher interest rates ahead.
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In today’s weekly market review, we tour the major markets to see what happened this week. Overall, the markets are in dip-buying mode, even as inflation roars higher and rate hikes are likely to become more aggressive.
New York Fed president John Williams said that if the central bank needs to raise rates by a half point, it should — reinforcing comments by Fed chairman Jerome Powell and other officials over the past week.
The Fed’s steps to contain inflation are “what ultimately will drive a more aggressive inversion of the curve, which we think is coming quite quickly,” Columbia Threadneedle Investments global head of fixed income Gene Tannuzzo told Bloomberg.
But that doesn’t necessarily signal a recession, since “this is a very different cycle and the first one in over 30 years where the Fed is playing catch-up to inflation,” he added. Despite the strong correlations in the past, as I discussed the other day.
Economists at both Citibank and Bank of America said they now expect the Fed to lift its key rate in multiple 50-basis-point increments.
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A quick look at the current state of play in New Zealand, as the IMF recommends higher rates, and the Treasury figures the losses from the RBNZ’s programmes. Plus house prices and credit eases. Lots of negative indicators….
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Labor has announced a Regional First Home Buyer Support Scheme, which to me is entirely political in nature, and further exacerbates the housing affordability issues we have been discussing. Meantime we discuss our data on rising mortgage stress in the regions, and why this is occurring.
https://alp.org.au/policies/regional-first-home-buyer-support-scheme
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Another major bank came out last month with a belated warning for mortgage holders, as the impact of higher mortgage rates hit. Meantime Westpac reaffirms their rise expectations, and lift fixed-rate loans to-boot.
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Today’s post is brought to you by Ribbon Property Consultants.
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Chinese property firms listed in Hong Kong face a March 31 deadline to file annual results, their first audited financial statements since the industry’s liquidity crisis spread. Transparency and governance concerns have cropped up alongside worries about developers’ ability to repay debt following a record number of defaults last year.
Evergrande and its two Hong Kong-listed units this week joined a handful of Chinese developers warning they will probably miss deadlines for reporting audited 2021 results. Separately, its property-services unit said it was looking into how $2.1 billion of its deposits were used as security for pledge guarantees and seized by banks.
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Caveat Emptor! Note: this is NOT financial or property advice!!
The latest in our deep dives on a post code. Today we look at a suburb north west of Sydney where units prices are lower than they were in 2017, and where relaxed planning regulations have created a transformed neighbourhood.
This is general discussion only, and the scenarios will change ahead.
You can find out more about our “One To One” service here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
US Stocks climbed on Tuesday, as growth stocks sidestepped growing expectations for the Federal Reserve to turn more aggressive on rate hikes, while meme-stocks including GameStop returned to rally mode. But the real signals coming from the bond market suggest recession ahead.
Inflation remains a major concern, as Federal Reserve Bank of St. Louis President James Bullard stressed the need for the Fed to move faster and more aggressively on rate hikes to curb the pace of inflation. Those remarks arrived a day after Fed Chairman Jerome Powell said the central bank would be prepared to hike by more than 25 basis points at upcoming meetings to “ensure a return to price stability.”
But note this, the bond market’s most reliable gauge of the U.S. economic outlook for the past half-century is hurtling toward inversion at a faster pace than it has in recent decades, raising fresh worries about the economy’s prospects as the Federal Reserve begins to consider aggressively hiking interest rates.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
