US Economy 'Holding Up Relatively Well,' IG Australia Says
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Yahoo
2 hours ago
- Yahoo
Major banks reveal interest rate cut predictions ahead of RBA meeting
The Big Four banks are unanimous that the Reserve Bank of Australia will be cutting interest rates next week. The Board will meet on Monday and Tuesday to discuss whether to hike, hold, or drop the cash rate from its current level of 3.85 per cent. Recent inflation, employment, and retail spending data have slowly led Commonwealth Bank (CBA), Westpac, and ANZ to join NAB in its July interest rate cut prediction. ANZ was the last of the Big Four to join the pack and said it was swayed by research showing that while retail spending was up, it's still a murky future. "The most recent reads on consumer confidence showing the prior uptrend remains stalled and ongoing uncertainty around US trade policy as we approach the expiry of the tariff pause, we now expect the RBA to cut the cash rate by 25 basis points at its July meeting," ANZ head of Australian economics Adam Boyton said. ANZ changes interest rate call as it jumps gun ahead of CBA, Westpac, ANZ Woolworths payment change hits dozens of supermarkets today Aussie earning $300,000 a year in job after completing three day course They all believe homeowners will be getting a 0.25 per cent cut on July 8. This would bring the cash rate down to 3.60 per cent. Despite getting similar cuts in February and May and inflation largely being brought under control, the Big Four believe the country isn't out of the woods just yet. CBA moved its prediction from August to July after consumer price index (CPI) data produced the best result since late 2021, with trimmed mean inflation falling from 2.8 per cent in April to 2.4 per cent in May."[The] monthly CPI print capped off a flow of data that should provide comfort to the RBA that a swifter return of the cash rate to neutral is both manageable and needed," Commonwealth Bank senior economist Belinda Allen said. 'The decision to cut the cash rate in July will still be a close one. We expect there to be a discussion of both leaving the cash rate on hold and cutting by 25 basis points.' Westpac followed that prediction a day later after the CPI data came in below its expectations, but insisted a July rate cut isn't the "shoo-in" that some expect. The bank's Belinda Ellis warned the quarterly inflation numbers could tell a different story when they're released later this month. 'In short, only because the RBA sees itself on a path of cutting rates soon will it decide to validate market pricing and get on with the next cut at its July meeting. But this is not the timing it previously thought it would be on," Ellis said. 'Given the lingering uncertainties and the RBA's concerns about a tight labour market, expect its post-meeting language to be non-committal, even a little grudging about the decision to cut.' This depends on who you ask and the answer could change in the coming weeks as more data comes in. Here's how many more cuts the Big Four are forecasting in 2025 and early 2026: CBA: Two more cuts to bring cash rate down to 3.35 per cent Westpac: Four more cuts to bring cash rate down to 2.85 per cent ANZ: Two more cuts to bring cash rate down to 3.35 per cent NAB: Three more cuts to bring cash rate down to 3.10 per cent Even though Commonwealth Bank believes there will be a cut next week, homeowners will also get another cut in August as well, it predicts. A poll of more than 14,000 Yahoo Finance readers found 67 per cent feel they would need at least four interest rate cuts to feel financially comfortable. According to Canstar, an owner-occupier with a $600,000 home loan debt today, and 25 years remaining on their loan, could see their monthly repayments drop by $90 with just one 0.25 percentage point RBA cut. That goes up to $150 per month if you have a $1 million loan. However, if you're on that $600,000 mortgage and there are four more interest rate cuts, you could be saving as much as $350 per month. Not only that, but you'd be able to borrow more if you wanted to crack the property market. Canstar found that a single person on the average wage was able to borrow $12,000 more after the recent May cut, while a couple could get an additional $23,000. If there are four more cuts, that single person could see their maximum borrowing capacity increase by almost $50,000 in the space of 12 months. 'When buyers see their maximum borrowing budgets rise at the same time, on the back of a policy change or a cash rate cut, the biggest winner in the equation is often the person selling the property," Canstar's director of data and insights, Sally Tindall, said. 'This cut will be a shot in the arm for the property market. However, if homeowners aren't equally encouraged to list their property for sale, then a surge in demand could see property prices rise even further."Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
2 hours ago
- Yahoo
ATO reveals highest paying jobs that don't require university degree: ‘$130,000 a year'
Australian Taxation Office (ATO) data has revealed the highest-paying jobs in Australia that don't require a university degree to do. The list is based on the tax return data of millions of Aussies, with the top job bringing in more than $130,000 a year on average. Drillers, miners and shot firers were the highest paying job, earning an average salary of $133,873 per year. The job involves assembling, positioning and operating drilling rigs and mining plant, and detonating explosives to attract materials from the earth and demolish structures. Most workers need a Certificate II or III, or at least one year of relevant experience to get into the job. Some roles in the group can also be more lucrative, with coal miners specifically earning $135,077 on average. RELATED ATO reveals 10 highest paying jobs in Australia: '$472,475 a year' Superannuation 'red alert' for millions as $1 billion in retirement savings feared lost Woolworths payment change hits dozens of supermarkets Drilling plant operators earned $132,272 on average, while mining blasting workers earned $126,320 on average during the year. Train or tram drivers came in second place with average earnings of $132,938. To get into the job, you'll usually need to complete a relevant vocational qualification, such as a Certificate III in light rail driving or Certificate IV in train driving, or have relevant experience. Train drivers specifically earned $137,6934 on average, while tram driver earnings were lower at $101,570 per year. Electrician distribution trades workers rounded out the top three with an average salary of $128,851. This includes electrical linesworkers and technical cable jointers. You'll usually need a Certificate III, including at least two years of on-the-job training. Electrical linesworkers earned $130,987 on average, while the income for technical cable jointers was lower at $96,199 per year. The ATO data is based on tax returns from the 2022-23 financial year. The list of highest-paying jobs is based on jobs that the Australian Bureau of Statistics has specified do not require a Bachelor's degree or above as an indicative skill level. Instead, many of the jobs will require a certificate or relevant experience. Here are the top 10 highest paying jobs that don't require a university degree, which is based on occupation groups. Driller, miner or shot firer $133,873 Train or tram driver $132,938 Electrical distribution trades worker $128,851 Other hospitality, retail or service manager $127,106 Practice manager $124,226 Crane, hoist or lift operator $121,782 Insurance investigator, loss adjuster or risk surveyor $117,005 Police $114,929 Safety inspector $114,498 Fire or emergency service worker $114,290 The ATO has also revealed the top 10 most lucrative professions overall, with surgeons taking the top spot, earning an average of $472,475 a year. Other medical professionals dominated the list, with anaesthetists in second place with average earnings of $447,193. The average Australian income for the income year was $74,240, while the median was $55, in to access your portfolio
Yahoo
3 hours ago
- Yahoo
The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P.
