Head of ASIC, Greg Medcraft, speaking to the Australian Financial Review:

  • "History shows that people don't know when they are in a bubble until it's over"
  • "I am quite worried about the Sydney and Melbourne property markets. In housing, the long-term average income to average price ratio is four to five times but at the moment it is at historic highs"
  • "There is always danger when rates get so low. That's when people start borrowing when they can't afford it. What generally happens is rates starts to rise which affects your ability to pay, and rate rises can actually bust a bubble, so you end up with a double whammy,"

ASIC is the Australian corporate regulator, Australian Securities and Investments Commission. While ASIC is not involved in setting interest rates, this is a very blunt message. The RBA cut rates in May, and are still seen as having and implicit easing bias, but further cuts are a long way off now, if at all.

AUD is slightly firmer this early morning:

Resistance initially around 0.8055/60