1. RBA lifts cash rate by forecasted 50 bps
Economists weren’t blindsided this time around as Reserve Bank Governor Dr Philip Lowe announced that the Australian central bank would lift the cash rate 50 bps to 1.35%, making it the largest back-to-back rise since the rate was first targeted in 1990.

If fully passed on to borrowers, recent rate rises would add $333 to monthly repayments for a typical $500,000 mortgage, $499 for a $750,000 mortgage, and $665 for a household with a $1 million loan, according to RateCity.

Despite the pressure placed on homeowners, Lowe has his sights set on reigning in the 7% inflation forecast by December.

“Today’s increase in interest rates is a further step in the withdrawal of the extraordinary monetary support put in place to help insure the Australian economy against the worst possible effects of the pandemic,” Dr Lowe said.

“The resilience of the economy and the higher inflation mean that this extraordinary support is no longer needed.

“The Board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead.”

2. Gloomy 12-month outlook for house prices
Following the RBA’s rate rise, experts have increased their concerns for the Australian property market over the next 12 months.

“I think it’s fair to say the risk of a house price crash over the next 12 months has been heightened significantly by the big jump in interest rates,” said Mark Bainey, Sydney-based developer and chief executive of Capio Property Group.

“I think more buyers would be spooked to enter the market, which will put a freeze on activity in the marketplace.

“It’s going to lead to a further slowdown in the market because many buyers won’t have the capacity to purchase anymore as the cost of the mortgage rises, and it might put pressure on existing homeowners who may be forced to sell as repayments increase.”

AMP Capital’s Shane Oliver believes house prices could fall by up to 20% nationwide if rates continue to rise by this magnitude.

3. Qld close to energy cap once again
Fears for the east coast energy crisis have sparked up once again as Queensland has experienced volatile swings in its wholesale power prices. These price movements could see the sunshine state hit its energy cap and potentially trigger intervention similar to the nine-day suspension of the National Electricity Market last month.

“Market analysts warned that sustained periods of prices at nearly $10,000 a megawatt-hour and above through Monday afternoon and another spike early on Tuesday meant the running seven-day total of wholesale prices in the state was again nearing a threshold that would automatically trigger a $300/MWh cap,” the AFR reports.

4. Crown Melbourne braces for $100 million fine with more potentially on the horizon
Victorian regulators have stepped in once more against the maligned Crown Resorts, and are set to hand down a $100 million fine for breaches of responsible gambling laws.

“It adds to the $80 million the Victorian Gambling and Casino and Control Commission (VGCCC) has already fined the company following the inquiry,” the AFR reports.

And this could just be the beginning for the casino, as regulators continue investigations and say they are considering “further potential disciplinary proceedings arising from other matters highlighted by the royal commission”.

5. ASX to slip almost 1%
ASX futures were down 62 points or 0.95% to 6479 near 6.40am AEST, with the AUD -1% to 67.96 US cents.

On Wall St: Dow -0.4% S&P 500 +0.2% Nasdaq +1.8%.

In Europe: Stoxx 50 -2.7% FTSE -2.9% CAC -2.7% DAX -2.9%.

10-year yield: US 2.81% Australia 3.54%.