Rates
These are fairly confronting borrowing costs, I think. Particularly if you are assessed at an even higher rate.
That said, I am mindful of my recent comments about the graph below, which suggests that (the rise in) yields are at or past the point at which they’ve imperilled equity market returns previously.
Yes, yields have shot higher, but it hasn’t really thumped equities (yet!) because the growth expecations (in stocks) are outweighing the higher discount rate impacts.
And whilst the RBA is likely to hike the rates a few more times, that is already in the price, at least based on the cash rate futures market.
The rates 12 months out are sitting at just under 5%. So a bit over 2 hikes are already in the forecast.
PMI
The Aussie composite PMI “flash” is out, you can see something of a moderation in the Aussie numbers. Not at all surprising, given the recent run in bad news (SoH, yields).
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