Make sure you check out the jobs report lottery result - a HUGE BEAT
Meanwhile, from the Reserve Bank of Australia, these quick headlines via Reuters :
- Vulnerabilities in household debt, housing have increased
- RBA says risks are more to the economic outlook than to financial institutions
- Regulators watching bank lending carefully, ready to tighten rules further if needed
- Rising debt makes households more vulnerable to potential income falls, higher interest rates
- Regulators focused on interest only loans, which risk amplifying a downturn in home prices
- Investor lending, home prices up sharply in Sydney and Melbourne, mixed in rest of country
- Mortgage buffers high overall, but one third of borrowers have no buffer or less than 1 month repayment
- Risk of apartment oversupply in some cities, challenging for builders and developers
- Australian financial system in good shape overall, banks profitable and well capitalised
- Banks will likely need to raise more capital in coming years to be "unquestionably strong"
- High valuations in commercial property mean leveraged investors vulnerable to price falls
- Local banks have curbed lending for commercial property, Asian banks stepped in to lend more
- RBA sees limited risk in shadow banking sector at moment, but watching carefully
- Financial stability risks remain elevated in china, debt at very high levels
Financial Stability Review
Check this out from the text of the report (pp. 20-21):
- Prepayments on mortgages increase the resilience of household balance sheets. Aggregate mortgage buffers - balances in offset accounts and redraw facilities - are high, at around 17 per cent of outstanding loan balances or around 2½ years of scheduled repayments at current interest rates
- However, these aggregate figures mask significant variation across borrowers, with available data suggesting that around one-third of borrowers have either no accrued buffer or a buffer of less than one month's repayments. Those with minimal buffers tend to have newer mortgages, or to be lower-income or lower-wealth households
ONE THIRD!
So much hinging on the labour market ...
