Diesel power
Stopped for a coffee and a booster slice at Caboolture servo today on the way home from the Gold Coast - that's the first time I've seen diesel for sale (in Australia) for more than $3 per litre...
It should probably go without saying that is uncharted territory, and the longer this goes on for the greater the pain and associated price pressures will be.
Bloomberg's chart below shows how when oil prices rise, this can pass through pretty quickly into higher food prices as transport and freight handling costs rise.
New home sales dive
New home sales fell by -20.3 per cent in February, with the first rate hike on February 4 apparently taking an immediate effect.
Further rate hikes in March and May will likely kill off much of the remaining optimism for residential construction, even before accounting for potential changes to property tax legislation in the Federal Budget.
Source: Housing Industry Association
The cost of capital is one thing, but the inputs into homebuilding, including a wide range of materials, piping and plumbing products, bathroom supplies - and the like - are all going to experience large price increases forthwith.
Source: ASX
Market pricing is now looking for a cycle high cash rate potentially peaking at 4.85 per cent by the end of the year, which would quite likely result in recessionary conditions for many consumers.
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