Moody's reported that data for the first quarter of 2010 shows arrears on Australian RMBS are starting to rise. Arrears greater than 30 days on prime RMBS increased to 1.34 per cent over the first quarter from 1.10 per cent in the previous quarter. Similarly, arrears on non-conforming RMBS rose to 13.02 per cent from 12.13 per cent, previously.Moody's notes there have been six consecutive 0.25 percentage point rate rises since October and this is now being reflected by the increase in arrears. At the same time, there is also a seasonal upward trend in delinquencies, due to holiday spending during Christmas and the New Year. However, the delinquency levels are not expected to increase significantly as official interest rates return to 'neutral' levels. Moody's expects stable collateral performance to continue in 2010, in light of the improved forecast for the Australian economy. The rating performance of the RMBS sector is expected to be stable.