1. How the rates fall…
The geographic split of mortgage types helps explain the RBAs pivot. Australia has one of the highest rates of variable home loans making the transmission mechanism very efficient.
Source: RBA, CHMC, KHFC. EMF, GPG, MBA, and S&P
2. The constant holiday…
United Airlines reported third-quarter results that beat expectations this week. This follows Aussie portfolio holding Qantas’ strong update last week.
United are expecting the travel rebound to weather a softer economy. They also made some interesting comments about how hybrid work can lead to more airline travel, permanently, saying that “with hybrid work, every weekend could be a holiday weekend”. Believing it’s not pent up demand, but “the new norm”. And this helps explain why September, which is normally an off-peak month, was the third strongest month-in their history.
Source: Evercore ISI Research
3. The United States of charts…
According to the charts we’ve seen this week, Americans have a lower life expectancy than the Chinese (largely due to the toll of Covid on the US), and are paying up for their OJ (due to hurricane damage). But have seen real wages go up only 6.9% over the last 43 years!
Source: Quartz, OECD, CDC
Source: The Daily Shot
US real wages
Source: U.S. Bureau of Labor Statistics