Australian Bond Exchange

Australian Bond Exchange Weekly Newsletter 9 December 2022

ABE weekly 9-12-2022

Key Points

  • RBA raises interest rates 25 basis points to 3.1%
  • AU Consumer spending still strong
  • Australia Household savings ratio lowering among families
  • US market sell-off continues for four straight sessions, mild recession fears for 2023
  • US FED interest rate decision next week


As expected by ABE, this week the RBA increased interest rates by 0.25 basis points, with rates currently standing at 3.1%. This was the eighth straight increase by the RBA with consensus in the market is that we expect further tightening.

On the back of the interest rate rise; CBA’s head of Australian economics Gareth Aird now expects the cash rate to rise again in February 2023 to a peak rate of 3.35 per cent. 1

The household savings to income ratio was reported as lowering from 8.3 per cent to 6.9 per cent over the quarter, the amount households are saving is falling, BIS Oxford Economics Sean Langcake commenting “the scope for consumers to fund growth in consumption from savings is dwindling quickly” 2.

Shares posted their second straight day of losses, impacted by the continuing global Tech sell-off and lower GDP growth than expected. Australian economic growth came in below the market’s expectations for the September quarter, at an annualised rate of 5.9 per cent.

US Markets

The market is looking to next week when the FED makes its interest rate decision. There are mild 2023 recession fears, which caused a mid-week sell-off in the markets.

We saw the S&P500 fall for the fifth straight trading session, while for the last four sessions the Nasdaq also finished down.

ABE will be looking at the Federal Reserve interest rate decision and will bring you commentary.

1Janda, Michael and Whitson, Rhiana. “Reserve Bank raises interest rates for eighth straight month”. ABC News Business, published Tue 6 Dec 2022 Accessed 7 Dec 2022.

2Johnstone, Poppy “Economy up 0.6 per cent in third quarter” MSN Markets, published 7 Dec 2022, Accessed 7 Dec 2022.


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