Crypto News: All Shook Up With the Property Blues

Good morning all, it's Garfield here coming to you from soon-to-be-sodden Sydney. Here's what's happening in our region today

Today's must-reads:

That shaking feeling starts to hit $7 trillion housing market
New Zealand adds its voice to China concern chorus
Climate change at top of agenda for new parliament

$7 trillion headache: The Reserve Bank of Australia has only just begun hiking interest rates, but already sentiment is souring rapidly in the nation's property markets. Another half-point increase is seen as likely at next week's RBA meeting, the question is whether such efforts to cool inflation will also bring down elevated housing prices fast enough to devastate the economy. So far there are signs of resilience — Aussies splurged in May after the first half-point hike in a generation — but many are fretting the worst is yet to come.

Rising China. New Zealand's Prime Minister Jacinda Ardern spoke out to say China's increasing willingness to challenge international norms must be resisted, talking at the NATO summit in Madrid. The Pacific is experiencing "mounting pressure on the international rules-based order" — as the world struggles to cope with the fallout from Russia's invasion of Ukraine.

Emissions pledges. Anthony Albanese's new government plans to meet some of its election vows by putting efforts to slow climate change at the top of the agenda when parliament meets next month. That means bills to make electric vehicles cheaper and to enshrine the Labor Party's commitment to cut the amount of carbon Australia pumps into the air to 43% below 2005 levels by 2030. EVs only account for 1.5% of Aussie passenger vehicles, but the new government expects they will be almost 90% of car sales by the end of the decade.

Low-inflation requiem. Federal Reserve Chair Jerome Powell and his peers are also meeting in the Iberian Peninsula — in the Portuguese town of Sintra. They're busy tearing up the playbooks of the past 20 years as they fear the world is shifting to a regime of persistently stronger cost increases.

Bonds' recession rally. While stocks dithered overnight bonds powered ahead as concerns intensify that central bank's focus on stamping out inflation will set off recessions. Traders in the US are now seeing a slower pace of rate hikes from the Fed sooner rather than later. The gloomier outlook helps explain the 15% drop in global stocks this quarter — the steepest selloff since the pandemic hit at the start of 2020.

Asian currency pain. The dollar meanwhile is surging on the combination of gloomy geopolitics and rising American interest rates and that's set Asian currencies on course for their worst quarter since 1997 — the Asian crisis year. The dilemma for the region's central bankers — also grappling with the fastest inflation in decades — is a stark one: forcefully raise their own borrowing costs to defend currencies and risk hurting growth, spend reserves that took years to build to intervene in foreign exchange markets, or simply step away and let the market run its course.

Australia is expected to say private credit growth slowed in May to a 0.6% monthly pace, from 0.8% in June
Australia also reports job vacancies for May
New Zealand gets business sentiment readings

View of the main temple of Prasat Thom, Koh Ker, April 6, 2022. Photographer: Thomas Cristofoletti for Bloomberg Businessweek

Epic art theft. Former Khmer Rouge child soldiers helped dig out Cambodian antiquities that later ended up at the New York Met. In tales that sound like the dark side of the Indiana Jones series, Bangkok-based British businessman named Douglas Latchford is at the center of one of the most complex art market investigations ever undertaken. Government officials and lawyers in the Cambodian capital of Phnom Penh, academics in Paris, heritage advocates in Washington, and federal prosecutors in New York City are all involved, trying to unravel what they consider an historic crime: the theft of Cambodia's archaeological treasures in a campaign of plunder that continued until almost the end of the 20th century.