RBA: FSR suggests markets are under-pricing risk - TDS

Analysts at TDS explain that there was no immediate read thru for monetary policy from the RBA's semi-annual Financial Stability Review. 

Key Quotes

“On the domestic front the Bank believes concerns about riskier types of housing borrowing have eased for now as regulatory measures improve new house lending. However the Bank is aware that household indebtedness remains a risk, in particular noting the step up in payments for those transitioning to principal and interest loans and the pick up in arrears.”

“One of the risks that the RBA has flagged for sometime, the large stock of apartments reaching completion, have been absorbed with little disruption. At the global level, the RBA reiterated that asset markets are underpricing risk, and China risks remain elevated.”