Economic Update September 2023

07 9월 2023

15 min read

Download article

Waiting for the turn

The global economy still proves resilient to cost of living pressures and higher interest rates as unexpectedly tight labour markets support activity. Central banks may need to hold rates higher for longer to bring inflation down, leaving investors overweight fixed income waiting for longer duration positions to prove their worth.

In Australia, the Reserve Bank of Australia (RBA) continues to search for the ‘narrow path’ to a soft landing, pausing its hiking cycle in recent months to preserve gains in the labour market as inflation starts to retreat and Australian economic activity, on the whole, has started to slow.

Download article

Written by

Alex Joiner

Chief Economist

RMBS and mortgage stresses: Modelling the impacts of stress scenarios

Australian household finances are under increasing pressure with monetary policy tightening and rising costs of living. This is testing the ability of mortgage holders to service their loans, which has implications for the housing market and the performance of residential mortgage-backed securities (RMBS). We anticipate that mortgage arrears and default rates will rise from their current levels and we have modelled various stress scenarios on rated notes in a recent prime RMBS transaction to assess the implications of this economic environment on these securities.

Andrew Beales

Associate, Debt Investments

Economic Update June 2023

Continued monetary policy tightening in recent months sees rates at levels where risks to inflation and wider economic activity are more finely balanced.

Alex Joiner

Chief Economist

Infrastructure, an asset class for all seasons

The role of infrastructure in institutional portfolios will continue to be a prominent theme for asset allocators in 2023, along with the increasing importance of managing the 'S' in ESG.