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ASX down as Lowe says RBA won’t use rates to cool housing market

·2-min read
Terrace houses in Sydney, ASX board showing companies in the red and RBA Governor Philip Lowe.
RBA Governor Philip Lowe said the bank will not use interest rates to cool housing prices (Source: Getty)

Good morning.

Here is your Friday morning wrap.

ASX: The ASX is set to fall at the open after global losses in the overnight session over inflation and a new COVD-19 wave.

The Aussie dollar was also firmly lower at US74.28 cents.

Wall St: Wall Street lost ground overnight, with the S&P 500 and the Nasdaq pulling back from record closing highs in a broad sell-off driven by uncertainties surrounding the pace of the US economic recovery.

As the bond market rallied on a flight to safety, all three major US stock indexes tumbled. The Dow Jones Industrial Average fell 259.86 points, or 0.75 per cent, to 34,421.93, the S&P 500 lost 37.31 points, or 0.86 per cent, to 4,320.82 and the Nasdaq Composite dropped 105.28 points, or 0.72 per cent, to 14,559.79.

Banks step up: Small businesses and Australians with home loans who are struggling through COVID-19 lockdowns can count on their banks to help them, the Australian Banking Association said.

A new national support package will be available to all small businesses and home loan customers who are significantly impacted by current lockdowns or recovery from recent lockdowns.

‘Wouldn’t work’: Reserve Bank governor Philip Lowe has told home buyers he is not going to jack up interest rates to cool a heated housing market.

Lowe said there was a common misconception the central bank would step in to choke off house price rises by raising interest rates.

"It would be the wrong thing to do, and I don't think it would work," he told economists on Thursday.

"If borrowing is unsustainable then we will be talking with APRA about prudential tools, but we are not going to use monetary policy to deal with rising housing prices."

Cyber crime: Universities and telcos are set to address proposed laws that would give the Australian government more powers to fight cyber attacks on critical infrastructure.

The federal government wants the power to intervene in and install software on some companies' networks. It also wants to force companies to report critical cyber incidents within 12 hours.

$439: Check out this surprising Aussie city that has the lowest rent for homes in the country.

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