RBA Hike Cycle Grinds Housing as Confidence Slumps

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RBA Hike Cycle Grinds Housing as Confidence Slumps

-2.70 Westpac Consumer78.20 Westpac Consumer-15 NAB Business Confidence-5.30 Home Loans-32.30 Investment Lending for

ASX 2009,153.20+0.27%

NZX 5014,179.86+0.62%

AUD/USD0.69-1.01%

NZD/USD0.56-1.24%

Market Snapshot

Asset	Level	Change
ASX 200	9,153.20	+0.27%
NZX 50	14,179.86	+0.62%
AUD/USD	0.69	-1.01%
NZD/USD	0.56	-1.24%
AUD/NZD	1.23	+0.20%
BHP	60.39	+0.87%
Gold	3,995.00	-0.87%
Brent Crude	93.33	+2.01%
Bitcoin	74,366.03	+0.88%
Australia 2Y Govt Yield	4.83%	0 bp
Australia 10Y Govt Yield	5.08%	-1 bp

Prior Economic Events

Data	Prior	Cons	Actual
Westpac Consumer Confidence Change	-4.70	-	-2.70
Westpac Consumer Confidence Index	80.40	-	78.20
NAB Business Confidence Index	-14	-	-15
RBNZ Financial Stability Report	-	-	-
RBNZ Press Conference	-	-	-
Home Loans Quarter-over-Quarter	-2	-	-5.30
Investment Lending for Homes	-11.20	-	-32.30

Today's Economic Events

Data	Prior	Cons	Time
RBA Baker Speech	-	-	18:30

Thursday (2026-11-12)
Business NZ PMI	56.50	-	16:30

Australian consumer confidence fell to 78.2 in November, with the change deteriorating 2.7%, as rate hikes bite into household sentiment.
NAB business confidence slipped to -15 in October from -14, while housing finance collapsed: home loans fell 5.3% q/q and investment lending plunged 32.3%.
RBNZ Governor Conway flagged worrying inflation expectations and pushed back on market pricing, as NZD/USD tumbled 1.24% amid diverging Fed-RBNZ paths.

Yesterday's Recap

Australian data painted a deteriorating picture. Westpac consumer confidence fell 2.7% in November to an index level of 78.2, down from 80.4 previously, as rate hikes bite. NAB business confidence slipped to -15 in October from -14 the prior month, extending the negative run.

Housing finance data released today showed home loans down 5.3% quarter-over-quarter versus -2.0% previously, while investment lending for homes collapsed 32.3% against a prior -11.2% — a stark signal that the RBA's tightening is transmitting forcefully through the housing channel. In New Zealand, the RBNZ published its Financial Stability Report and held a press conference, with Governor Conway commenting that NZ inflation expectations are worrying and that market pricing won't dictate rate decisions. Markets reacted sharply: AUD/USD fell 1.01% to 0.69 and NZD/USD dropped 1.24% to 0.56, while AUD/NZD edged up 0.20% to 1.23.

The ASX 200 gained 0.27% to 9,153.20 and NZX 50 rose 0.62% to 14,179.86, with BHP up 0.87% to 60.39. Australian 10-year yields eased 1 bp to 5.08%, with 2-year yields flat at 4.83%.

The Day Ahead

The calendar is light. RBA Baker delivers a speech today at 18:30 ET, a high-impact event that markets will parse for any signal on the rate trajectory following the 3 November hike to 4.85%. New Zealand's Business NZ PMI is due Thursday at 16:30 ET, with the prior reading at 56.5 — a print that will be watched for whether NZ manufacturing momentum is holding up.

No Australian top-tier data is scheduled, leaving the Baker speech as the primary domestic catalyst. Offshore, Fed rate-hike expectations and the resulting USD strength remain the dominant driver for AUD and NZD crosses.

Other Economic Notes

The Australian housing slump is deepening precisely as the RBA prepares for its next move, with the 32.3% collapse in investment lending a particularly worrying signal for construction activity ahead. ↓ p.2

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Other Economic Notes (continued)

Consumer confidence at 78.2 sits well below the neutral 100 level, suggesting households are retrenching. Business confidence at -15 reinforces that the private sector is cautious. In New Zealand, the RBNZ's financial stability assessment and Conway's inflation-expectations warning suggest the central bank remains uncomfortable even as it held in October.

China's growth outlook remains the critical external variable for both economies, given Australia's iron ore and LNG exposure and New Zealand's dairy and tourism linkages.

Global Macro News

Fed rate-hike bets are boosting the dollar, with the yen slumping sharply and both AUD and NZD under pressure as US yields attract capital. The divergence between Fed tightening expectations and the more cautious RBA and RBNZ outlooks is the central FX theme — AUD is slipping toward March lows. Brent crude jumped 2.01% to 93.33, a tailwind for Australian LNG revenues but a headwind for domestic inflation.

Gold fell 0.87% to 3,995. Bitcoin rose 0.88% to 74,366. Iran talks failed to lift NZD/USD, keeping the kiwi subdued.

Australian inflation is proving more stubborn than elsewhere, complicating the RBA's task relative to peers. The RBA has also issued warnings on AI's implications for the economy and on superannuation and mortgage holders.

Continuation

ANZ Central Banks Watch

The RBA raised the cash rate 25 bp to 4.85% at its 3 November decision — the highest level in 18 years — and its next meeting is 8 December. Commentary from the RBA warns the inflation fight may require higher unemployment, and Australian CPI at 3.90% remains above target, keeping the tightening bias intact. The RBNZ held the OCR at 2.75% on 28 October, having last hiked 25 bp on 2 September; its next meeting is 9 December.

Governor Conway's remarks that inflation expectations are worrying and that market pricing won't dictate decisions signal the RBNZ retains optionality. The two central banks diverge in level — Australia at 4.85% versus New Zealand at 2.75% — reflecting different stages of the cycle, though both retain a hiking bias rather than easing. Housing market linkages are central: Australia's finance collapse and New Zealand's construction-sensitive economy both constrain how far rates can rise.

ANZ Macro Daily(Beta Mode)