Daily Commentary BY THE CURVE TEAM –

Daily Insights – Macroprudential Reform Arrives

6th of October, 2021

RBA Shows Hand on Macroprudential

  • The RBA said “loan serviceability buffers” must be appropriate, when assessing the risks of rapid credit growth.
  • This morning, the below announcement from APRA followed…

APRA Raises Lending Criteria

  • Lenders will need to assess borrowers under a 3% interest rate environment, rather than a 2.5%.
  • Reducing aggregate financial leverage is the primary motivator, according to APRA.

Another Record Trade Surplus

  • The surplus was up $2.4 billion to another record of $15.1 billion.
  • Exports up 4.1%, with metal ores down $0.7 billion as iron ore fell 25% over the month. Resources were up $1.3 billion.
  • Imports were down 1.5%. Other capital goods led the falls, which could be related to supply chains or a weakening Australian dollar.

Retail Sales Fall

  • Were down 1.7% for August.
  • NSW was down 3.5%, Victoria 3% and the ACT 19.9% (having a smaller population increasing the volatility of the data).
  • They remain 5.4% above pre covid level, which is 3.6% annualised.

Josh Stewart

Associate - Money Markets