Westpac

Economists attributed the rebound partly to the market’s expectations that interest rates had peaked. But the other key driver – the drastic supply/demand imbalance – means higher prices, especially for rents, may be further complicating the central bank’s task.

For those planning to invest in offshore assets, the decision whether to hedge currency exposure is an important one as movements in the Australian dollar can either erode or add value to an investment.

The four majors along with AMP and Macquarie have paid or offered to pay a total of $4.7 million for charging fees for advice services they did not provide and for noncompliant advice, bringing to a close an eight-year review by ASIC and a key chapter of the advice industry shakeup led by the Hayne commission.

Analysts agree Australia’s big four banks are entering 2023 from a position of strength as they pass on rising interest rates to borrowers. However, headwinds remain, and the total return picture for shareholders looks more complex.

With economists expecting the Australian dollar to strengthen this year, investors are looking to currency-hedged funds to remove FX exposure that threatens to erode the value of their international investments.

Economists agree the outlook for house prices in 2023 is largely dependent on upcoming interest rate decisions by the Reserve Bank of Australia, and signs of weakness are already appearing. Complicating matters further, borrowers face an impending fixed-rate cliff.

Combined cash profits from Australia’s big four banks increased 6.5 per cent to $28.5 billion in FY22, delivering a bumper year ahead of a looming deterioration in economic conditions.

With inflation, interest rate hikes and other economic stress weighing heavily on Australian households, key recent data show consumer sentiment approaching new lows while overall spending continues to climb.

Higher interest rates, a slowing property market and the promise of loan defaults is curbing the enthusiasm of analysts on future bank earnings.

If there was one word to summarise the relationship between the big four banks and interest rates, it would be volatile. In March, the banks rallied after the Reserve Bank of Australia shifted its dovish rhetoric and signalled imminent rate rises to combat inflation. Now with the RBA acting on those increases by most recently passing a 50 basis point increase, big four shares are tumbling over themselves.