It’s that time of month when the boffins at Martin Place publish their updated Chart Pack, which you can find in full here.
Here are a few that standout for a closer look. First its interest rates, with the lagging RBA showing its hand:
As the rest of the world got moving beforehand, although Japan is only now playing catchup:
This has caused a jump in Aussie 10 year bond yields but:
It’s the differential with US Treasuries that will keep the Australian dollar depressed:
Moving on to housing with interest rates spiking across the board:
With house prices experiencing big retractions:
As loan commitments falter:
Meanwhile inflation is still not really under control:
Largely due to tradable (external factor) inflation, like energy prices. If only we had some way of ensuring cheap, plentiful and reliable domestic energy?
Inflation combined with falling house prices and rising interest rates is having a big impact on consumer sentiment:
Let’s end with a few business and banking indicators, with business investment still bottoming at multi-decade lows:
While the major banks remain insanely profitable, still pushing 10% plus ROE (when it should be 2-3% at most if they were nationalised):
Interestingly, Net Interest Margin (NIM) is still going down, now below the 2% level:
The only chart to really watch and which explains the last 20 plus years of economic “miracle” – the Terms of Trade:
2023 will very likely see Australia avoid recession thanks to extreme immigration-driven population growth. But per capita living standards will fall, as was the case through the 2010s “lost decade”.