Rates to rise as war goes on; auction market tumbles; YouTube biggest media company

Rates to rise as war goes on; auction market tumbles; YouTube biggest media company

News in brief

The local housing market is beginning to stutter, just ahead of likely interest rate rises, with auctions over the last week recording their lowest preliminary clearance level all year. It was a busy weekend with close to 3,000 homes going to auction, according to Cotality.

 

The share price of ASX listed Immutep tumbled 90 per cent on Friday, after the lung cancer therapy developer abandoned clinical trials. That wiped out more than $500 million from its market valuation.

 

YouTube has become the largest media company in the US in terms of annual revenue, surpassing Disney for the first time.

 

Porsche, the German car market that was once the most elite of fashionable brands, plans to cut jobs as it positions itself to counter US tariffs, and revamp its less-than-successful electric vehicle policy.

 

Israel and Iran continue to trade strikes, while missile interceptions have been reported in Saudi Arabia, the UAE and Qatar. US President Donald Trump says Iran wants to make a deal to end the war, but he doesn't want to yet "because the terms are not good enough".

Fear-o-meter

RBA deputy governor Andrew Hauser speaking to Michelle Grattan on The Conversation’s podcast:

 

“The Australian economy in many ways is in good shape. Growth has recovered quite materially over the past year. Unemployment is close to historic lows and compares very favourably internationally. And average levels of wealth and income in the economy are pretty good by international comparisons.

 

“But you know, we have a problem with inflation. It’s too high. The latest data, as you say, headline inflation in January is 3.8, underlying 3.4 per cent on a year earlier. And our projection is that inflation will only return to the target range by the end of this year or into next year and only back to the midpoint of that target range in 2028.

 

“Our projection in February before the Iran attacks was for inflation only to return to the midpoint of the target on the assumption, the technical assumption, that the cash rate did pick up a little bit further from where it is now.

 

“So, the question is how the data since then, both in the domestic economy and on Iran, change that picture. There’s clearly information on the upside for inflation over that period.” 

Fear & Greed Q+A today

On the week ahead for the economy, including the RBA board meeting today and tomorrow:

 

“The RBA board members — the two people, that’s the governor and the deputy governor, so Michele Bullock and Andrew Hauser — will probably be arguing for a rate hike.

Now we’ve learned from this new monetary policy board that there is not, like in the olden days, a rubber stamp on what the RBA is thinking. These independent members of the board do have monetary policy expertise and they do have their finger on the pulse of the economy, perhaps in a slightly different way to the RBA.

 

But it does mean — and a lot of us economists are debating this right now — that it is a contestable decision. And until Andrew Hauser came out last week with his very, very hawkish comments, the big banks and the market pricing for the meeting tomorrow was probably not expecting a hike.

It was really only his hawkish comments that fuelled this move to the other side of the ship where maybe they won’t… they probably will.

 

So the RBA obviously looking at the global issues, the high oil price, the direct effect of higher oil prices on inflation, thinking that in any event inflation to begin with is already a little too high for their liking — and hence the high probability that we’ll see the rate hike tomorrow afternoon.”

All four of the big banks are now tipping a rate hike tomorrow, after the Reserve Bank Board meets. It would take the cash rate to 4.1 per cent. The banks aren’t just predicting it. They are moving already. ANZ has hiked fixed mortgage rates before the RBA has even met. In their defence, fixed rate mortgages are priced off the bond market, and yields have been rising. Variable rate home loans are priced off the cash rate. ANZ is not alone. According to Canstar, 26 lenders have hiked at least one fixed rate in the past fortnight.

Greed-o-meter

	Name	Net worth (USD)	Company
1	Elon Musk	839 b	Tesla / SpaceX
2	Larry Page	257 b	Google (Alphabet)
3	Sergey Brin	237 b	Google (Alphabet)
4	Jeff Bezos	224 b	Amazon
5	Mark Zuckerberg	222 b	Meta
6	Larry Ellison	190 b	Oracle
7	Bernard Arnault & family	171 b	LVMH
8	Jensen Huang	154 b	Nvidia
9	Warren Buffett	149 b	Berkshire Hathaway
10	Amancio Ortega	148 b	Inditex (Zara)

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There is a record 3,428 billionaires in the world, according to Forbes, worth a total $US20.1 trillion. The latest Forbes Billionaires List estimates the staggering wealth of these individuals based on stock prices and exchange rates from March 1.

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Source: Forbes