AUSTRALIA DATA: Home Loan Values Continue Rising
Feb-12 01:23
The new quarterly lending indicators that replace the monthly series were released today for Q4. The total number of home loans fell 0.4%, the first drop since Q1 2024, but the value rose 1.4% q/q, the third straight quarterly rise, to be up 16% y/y. In its December minutes, the RBA pointed out that while policy was restrictive, there were “indications that financial conditions were not restraining credit growth as much as had been expected”. This data is consistent with that view.
- The number of home loans fell 0.4% q/q but are still 7.2% higher than Q4 2023. In Q3 they rose 2.1% q/q and 15.5% y/y. The value didn’t slow as much and remained strong growing at 1.4% q/q & 16% y/y but down from 5.3% & 24.7% in Q3.
- The slowdown in both numbers and values of home loans was due to investors with them falling 4.5% q/q, the first quarterly decline since Q1 2023, and 2.9% q/q respectively, but this looks like payback for a run of strong increases.
- Lending to owner occupiers remained robust with the number of loans rising 2.2% q/q and 4.0% y/y and the value 4.2% q/q and 12.7% y/y. The value of lending to first home buyers rose 1.5% q/q & 5.5% y/y after -0.8% & 16.8% in Q3.
- The number of owner-occupier refis rose 12% q/q in Q4 after +4.9%.
Australia value of new loans for dwellings ex refi A$mn
Source: MNI - Market News/ABS
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AUSSIE BONDS: Heavy & At Session Cheaps After Today’s Local Data Dump
Jan-13 01:23
ACGBs (YM -15.0 & XM -8.0) have extended morning weakness to be sharply cheaper and at the Sydney session's worst levels.
- The Melbourne Institute Inflation Index rose 0.6% m/m in December versus +0.2% in November. The index rose 2.6% y/y versus +2.9% in November.
- ANZ-Indeed job advertisements rose 0.3% from a month earlier (-12.5% y/y) in December.
- There have been no cash dealings in US tsys in today’s Asia-Pac session with Japan out for a holiday. TYH5 is, however, slightly weaker at 107-11, -0-01+ from NY closing levels.
- Cash ACGBs are 8-14bps cheaper, led by the short end.
- Swap rates are 7-12bps higher, with the 3s10s curve flatter.
- The bills strip has bear-steepened, with pricing -3 to -13.
- RBA-dated OIS pricing is 2-14bps firmer across meetings today. A 25bp rate cut is still more than fully priced for April (105%), with the probability of a February cut at 69% (based on an effective cash rate of 4.34%).
- AOFM Bond issuance will resume this week, with A$800mn of the 3.50% 21 December 2034 bond to be sold on Wednesday and A$700mn of the 2.75% 21 November 2027 bond to be sold on Friday.
US TSY OPTIONS: Option Flow: SFR Fly Sold
Jan-13 01:08
- BSFRM6M8 (SFR June26/June27/June28) Fly sold at .03 x6000. Post time 11:26.53 AEST
EQUITIES: Asian Equities Opened Lower Following Strong US Jobs Data On Friday
Jan-13 00:59
- Asian equities have opened lower this morning, extending declines after strong US jobs data affirmed the Fed's stance to keep interest rates steady amid lingering inflation. Australian and South Korean shares fell, while Japanese markets were closed. US equity futures edged lower following Friday’s 1.5% drop in the S&P 500.
- Investors are now focused on upcoming US inflation data, including CPI on Wednesday and New York Fed inflation expectations on Monday. December's US nonfarm payrolls showed strong job gains and a lower unemployment rate, prompting some major banks, including Bank of America, to revise rate cut expectations, with some predicting no cuts this year.
- In corporate news, Johnson & Johnson is exploring a bid for Intra-Cellular Therapies, while Bain Capital sweetened its offer for Australia’s Insignia Financial, while Chinese stocks are off to their worst annual start since 2016, with markets awaiting critical trade and money supply data.
