ANZ believes RBA interest rate cut won’t land until next year
Peter Hannam
Last week’s news that the economy had slowed to a crawl at the start of 2024 might have prompted borrowers to hope an interest rate cut couldn’t be too far off.
As one sign economists at least aren’t convinced, we have ANZ this morning becoming the first of the big four banks to push back their forecasts of the first rate cut until into next year.
Along with CBA, NAB and Westpac, ANZ had pencilled in a rate cut by November – or after the Reserve Bank board meets four more times. Now the ANZ is tipping February next year. The bank said:
The stronger-than-expected Q1 CPI … makes it hard to see the RBA being sufficiently confident that inflation will return to and stay in the band by the time the November meeting comes around.
ANZ, though, still expects two more rate cuts in 2025, “most likely” in April for the first of them with the third not coming until the final three months of next year.
The consolation, I suppose, is that ANZ (and so far, most economists and investors) is not expecting another rate rise before the cuts begin.
Still, a couple of statistical surprises from the ABS might tilt those expectations one way or the other.
Key events
Leaving Paris agreement would be ‘economic disaster and climate catastrophe’, minister says
Assistant minister for competition, charities and treasury, Andrew Leigh, said it would be an “economic disaster and a climate catastrophe” to cut targets as part of the Paris agreement.
Speaking to 2CC Breakfast radio earlier this morning, he said breaching the Paris agreement “puts you in company with Iran, Libya and Yemen” and jeopardises Australian investment and jobs:
We [would] hurt Australia’s international reputation as a destination for clean tech investment [and] see Australian emissions go up [and] Australian jobs go down. It would be an economic disaster and a climate catastrophe. So Peter Dutton is actually worse on climate change than Scott Morrison or Tony Abbott… [because even Abbott] wouldn’t pull out of the Paris agreement.
Host Stephen Cenatiempo argued that the “climate war” line is a buzzword that “means nothing”, but Leigh disagreed:
There was a huge war over climate and using the issue of climate in order to divide Australia. What we’ve seen in the United Kingdom and New Zealand is sensible conservatives working to get emissions reduction. The sort of approach that Malcolm Turnbull championed. The reason that Malcolm Turnbull got turfed out of the Liberal party leadership, not once but twice, was because he wanted a sensible, business friendly approach on climate change.
Police dig up buried truck as part of investigation Brazilian diver’s death
New South Wales police have excavated a buried truck as part of the investigation into the death of a Brazilian diver in Newcastle.
The diver was located unresponsive in the water at the Port of Newcastle on 9 May 2022, with 54kg of cocaine located nearby. He could not be revived, and was later identified as 31-year-old Brazilian national Bruno Borges Martins.
The location of an alleged second diver – 32-year-old Jhoni Fernandes Da Silva – remains unknown. To date, two men have been charged and remain before the courts.
On 28 May this year, detectives executed a search warrant at a Menangle property where they located a white Mitsubishi Fuso truck – which they will allege was used by those involved with the “failed drug rip”.
The truck was last seen travelling southbound on the M4 Motorway at Pennant Hills about 6.30pm on 8 May 2022.
Detectives are appealing for information about a Toyota Townace Van with the NSW registration WNY439, which was seen travelling with the truck.
As Elias Visontay reported just earlier, all staff with budget airline Bonza have been sacked ahead of an announcement this afternoon.
We’ve got more details for you now in the full story, which you can read below:
Albanese government announces almost $15m for long Covid research
Natasha May
Australian researchers will hope to better understand the impacts of long Covid with $14.5m in funding from the government.
The World Health Organization defines long Covid as occurring in people still experiencing symptoms three months after their initial Covid-19 infection, when those symptoms can’t be explained by an alternative diagnosis.
As many as one in five suffer post-viral symptoms, according to a study from the Australian National University of 11,000 people in Western Australia who tested positive to Covid-19.
The government has today announced 12 grants, which are the first investments from a total $50m committed to generate better evidence on:
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How people experience long Covid, including the impact on their physical and mental health and social and emotional wellbeing;
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The population-wide and health system impacts;
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The cause, progression and factors that influence prognosis;
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National trials to rapidly assess and fast‑track therapies.
The health minister, Mark Butler, said
The Australian government recognises the long-term impacts of Covid-19, including for those who experience prolonged symptoms following an acute Covid‑19 infection. Long Covid is an emerging health issue, both in Australia and internationally.
The Albanese government is strengthening Medicare for all Australians, but particularly to provide the kind of multidisciplinary team-based healthcare for people with chronic and complex conditions like long Covid.
The announcement comes as health authorities and experts are warning the nation is in the grip of a new wave of Covid-19 and other winter illnesses:
NSW police say masked home invasion in Sydney a ‘targeted’ attack
Supt Adam Whyte from New South Wales police has provided an update after a man was shot during an alleged home invasion by seven masked men in Sydney’s south-west. We covered this a bit earlier in the blog here.
Speaking to reporters, Whyte said that just after 12.30am this morning seven people arrived at a property in Carnes Hill and entered a home wearing face coverings and balaclavas, with three armed with either a machete, shotgun or pistol.
They’ve entered the home and terrorised the four occupants in that home, who were aged between 25 and 51. During that time, they demanded money. At some point, the firearm was discharged into a 25-year-old male, who’s currently at Liverpool hospital being treated for his injuries.
Whyte said the alleged offenders fired a shotgun into the side of a vehicle after exiting the house, and set fire to the front door (which later self extinguished) before all seven people left.
We can say that it is a targeted shooting, not a random shooting, [but] we’re still working through [the details] to work out the parties involved.
Whyte could not say whether the people left with any cash, or whether the alleged attack was gang related.
Melbourne ratepayers to cover cost of fixing beheaded King George V statue
Melbourne ratepayers will be slugged more than $10,000 to clean a statue of King George V, which was beheaded and covered in red paint in the latest attack on colonial monuments in Victoria.
As AAP reports, the statue in Kings Domain on Linlithgow Avenue was targeted between Sunday evening and the early hours of the King’s Birthday public holiday on Monday.
Melbourne city council deputy lord mayor Nicholas Reece told ABC Radio this morning:
The clean up alone is about $10,000 and that’s before we get to the cost of repairing and reinstating the statue – this is ratepayers’ money we’re talking about here.
We cannot allow statues to be decapitated or chopped down like this, and that then becomes a trigger for them being removed. That’s not the way we do it in Melbourne.
The red paint, the decapitating – that’s an act of violence.
All Bonza staff sacked ahead of airline announcement
Elias Visontay
There’s bleak news for budget airline Bonza after the administrators determining its future terminated all staff on Tuesday morning.
Guardian Australia understands that administrators from the firm Hall Chadwick notified all staff on Tuesday they had been terminated.
A spokesperson for the administrators told Guardian Australia a statement would be released on Tuesday afternoon detailing the future of the airline, after staff had been notified.
Peter Hannam
AGL eyes energy transition and ‘connected devices’ with investment in software platform
With all this political chatter about emissions targets being met or missed, it’s worth a reminder that consumers are increasingly equipped to make a few decisions of their own.
As we noted over the weekend, there’s an array of devices available for consumers that allow their use to be remotely activated, as in this piece:
In fact, some of them – such as home batteries and, down the literal track, electric vehicles – will be enabled to supply power to the grid at times of high prices. Wily consumers will be able to make some money, and the whole grid might avoid some unnecessary investment.
Businesses scent an opportunity, too. On cue, today we have AGL Energy announcing they are pumping about $150m into the UK-based Kaluza to buy a 20% stake in the energy software firm.
Full details of how customers might benefit aren’t available yet, but it’s a pointer to where the industry is headed. More than a third of Australians have solar panels on their rooftops but, interestingly, only use about a third of the power they produce (according to a forthcoming book, My Efficient Electric Home Handbook).
In a statement, Kaluza founder Stephen Fitzpatrick said:
This AGL deal is a major step towards Kaluza’s mission to help power a world where net zero is within everyone’s reach. Australia is ahead of the curve in tackling the intense demands on its energy system – from the most volatile energy prices to the proliferation of EVs and incorporating solar into the grid.
ANZ believes RBA interest rate cut won’t land until next year
Peter Hannam
Last week’s news that the economy had slowed to a crawl at the start of 2024 might have prompted borrowers to hope an interest rate cut couldn’t be too far off.
As one sign economists at least aren’t convinced, we have ANZ this morning becoming the first of the big four banks to push back their forecasts of the first rate cut until into next year.
Along with CBA, NAB and Westpac, ANZ had pencilled in a rate cut by November – or after the Reserve Bank board meets four more times. Now the ANZ is tipping February next year. The bank said:
The stronger-than-expected Q1 CPI … makes it hard to see the RBA being sufficiently confident that inflation will return to and stay in the band by the time the November meeting comes around.
ANZ, though, still expects two more rate cuts in 2025, “most likely” in April for the first of them with the third not coming until the final three months of next year.
The consolation, I suppose, is that ANZ (and so far, most economists and investors) is not expecting another rate rise before the cuts begin.
Still, a couple of statistical surprises from the ABS might tilt those expectations one way or the other.
Two alleged ‘targeted attacks’ on Melbourne businesses amid tobacco wars
Victorian police are investigating two alleged attacks on Melbourne businesses early this morning, amid the ongoing tobacco wars.
Police said a car rammed into the roller shutter of a tobacconist on Tarneit Road, Werribee just after 4am, before the alleged offender fled on foot, leaving the vehicle at the scene.
No one was inside the business at the time, and investigators are treating the incident as a targeted attack at this stage.
Meanwhile, police said a business on Costas Drive in Hoppers Crossing was targeted in a separate alleged arson attack this morning, just before 5am.
Police said a passerby managed to extinguish the fire before emergency services arrived, and no one was inside the business at the time of the incident.
Investigators are also treating this incident as a targeted attack.
Damaging winds forecast for much of Tasmania today
The Bureau of Meteorology says damaging winds will affect northern and western Tasmania today.
Victoria is also forecast to be hit by damaging winds today.
The Bureau said a cold front will pass across Tasmania today, bringing “a vigorous northwesterly flow ahead of it”.
Damaging winds of about 70km/h, with peak gusts above 100km/h, are predicted over the northern, western and some eastern districts, including the Furneaux islands and King Island.
The damaging winds were expected to ease below warning thresholds by this evening, the bureau said.
Snow starts to fall at Victoria’s Mt Hotham
Snow has begun falling at Mt Hotham in Victoria, with temperatures sitting below 0C since early this morning. The resort shared this video to X just earlier:
Australia’s ski season had a grassy start this year, with one resort trying to remain upbeat “although we may not have snow on the ground.”
In case you missed it, you can read the full story from Daisy Dumas below:
Borrowers in arrears on the rise but from ‘a low level’, financial regulators say
Peter Hannam
Every three months, the Council of Australian Financial Regulators get together to kick the tyres of Australia’s banks, etc, to assess how they’re all travelling.
The council, as you might imagine, groups the Reserve Bank, the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority and treasury.
Anyway, their general assessment remains steady: yes, higher interest rates are hurting but borrowers are making adjustments and most are continuing to meet their repayments. The council said:
Members observed that the share of borrowers falling behind on mortgage payments has continued to rise, as have financial hardship applications, but from a low level.
The gang of four, so to speak, also checked in with the Australian Financial Security Authority (Afsa) for their regular annual chat. They told a similar story, with Afsa stating:
While personal insolvencies remained near historically low levels, the Council noted that there had been an increase in insolvencies for both individuals and companies, particularly small and medium sized enterprises, over the previous twelve months.
This followed a period where insolvencies had been well below usual levels reflecting the significant support measures put in place during the pandemic, including those from the ATO.
There’s no doubt many households and firms are hurting from the rate hikes and a slowing economy. It’s worth remembering, though, that debt arrears and bankruptcies were artificially suppressed during the Covid period and some bounce back or even catch up was inevitable.
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