Aus macro

Private sector credit data are out.

Recall these are credit aggregates, so stock not flow.

The housing investor data has trended a touch higher, and that has pulled total housing data up, despite owner-occupier month-on-month data remaining (in our view) fairly flat.

Still, the total quantum is quite modest, and given rate hikes (the most recent only being in November, this month, which already feels like 3 months ago) we are unlikely to see an ongoing recovery in credit.

In general, however, I think it is fair to say the credit data for housing might be telling us more about the surge in listings (which we could see in the REA and DHG data) for people keen to sell their home, particularly if rate hikes have pressured cashflows.

Business credit at 0.41% was quite soft, and has weakened quite sharply over the past year.

Normally, softer credit would not be a ringing endorsement for the banks, but their share prices are already quite depressed, hence their very large fully franked yields (which are high enough that the market is essentially telling you the dividends will come down as the bad debts go up, or are otherwise competed away).

We are underweight, and will probably keep it that way for now.

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