New housing loans drop 7.4pc in quarter

Original article by Samantha Bailey
The Australian – Page: 19 : 13-Dec-18

A new report from the Australian Prudential Regulation Authority shows that $89.2bn worth of new mortgage loans were written in the September quarter, which is 7.4 per cent lower than previously. However, authorised deposit-taking institutions have reported a 5.4 per cent increase in the total value of housing loans in the year to September. Chris Bedingfield of Quay Global Investors says the annual rate of house construction is now too high, given that banks are tightening their lending criteria. He adds that the Reserve Bank is now more likely to reduce rather than raise the cash rate.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, QUAY GLOBAL INVESTORS, RESERVE BANK OF AUSTRALIA

Expect the RBA to hold fire on rates

Original article by James Glynn
The Australian – Page: 27 : 13-Dec-18

The Reserve Bank is still more likely to tighten rather than ease monetary policy, despite recent comments by governor Philip Lowe. He was most likely just outlining how the central bank could be expected to respond – including the potential for quantitative easing – in the event of an economic downturn. Although the Reserve Bank is still concerned about issues such as an emerging credit crunch, the odds still favour a rate rise, although this is unlikely to be for some time.

CORPORATES
RESERVE BANK OF AUSTRALIA

RBA set to freeze rates trigger

Original article by Joyce Moullakis
The Australian – Page: 17 & 18 : 10-Dec-18

Factors such as Australia’s sluggish GDP growth in the September quarter and the outlook for the housing market have prompted some economists and market analysts to forecast that official interest rates will remain on hold until 2020. They include Paul Bloxham of HSBC and Daniel Blake and Chris Nicol of Morgan Stanley. However, Shane Oliver of AMP Capital expects the cash rate to be cut rather than increased, most likely in the second half of 2019.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIGROUP PTY LTD, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Reserve flags rate cut, cash splash

Original article by Adam Creighton
The Australian – Page: 1 & 8 : 7-Dec-18

The Reserve Bank of Australia’s deputy governor Guy Debelle has indicated that there is potential for further monetary policy easing. The central bank has left the cash rate unchanged at 1.5 per cent since August 2016, and it has signalled in the past that a rate rise is more likely than a cut. Debelle has also indicated that the RBA could adopt a quantitative easing policy if it is considered necessary in order to stimulate the economy. He has also praised Labor’s fiscal stimulus at the onset of the global financial crisis, saying it was a key factor in the resilience of the domestic economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, FITCH RATINGS LIMITED, BUSINESS COUNCIL OF AUSTRALIA, STANFORD UNIVERSITY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Upbeat RBA welcomes higher wages

Original article by William McInnes, Tim Boyd
The Australian Financial Review – Page: 7 : 5-Dec-18

Reserve Bank of Australia governor Philip Lowe notes that the outlook for the labour market is positive and the unemployment rate likely to fall further. In a statement accompanying the central bank’s monetary policy decision, Lowe also welcomed signs of wages growth. The RBA left official interest rates on hold at 1.5 per cent for a record 28th month on 4 December, and Sally Auld of JP Morgan says the timing of a rate rise will depend on the outlook for wages. The consensus of economists polled by Bloomberg is that the cash rate will remain unchanged until at least the December 2019 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, BLOOMBERG LP, BIS OXFORD ECONOMICS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED

Challenge emerges to inflation target regime

Original article by Vesna Poljak
The Australian Financial Review – Page: 27 : 22-Nov-18

The Bank of Canada has signalled that it will undertake a review of alternatives to its inflation target of two per cent. Options that the central bank will consider include increasing the inflation target, targeting aggregate prices or nominal income, and adding a full employment objective. The move may increase pressure on the Reserve Bank of Australia to reappraise its own inflation target of 2-3 per cent. Some economists have argued that the RBA’s inflation target is too high, although many advocate the status quo.

CORPORATES
BANK OF CANADA, RESERVE BANK OF AUSTRALIA, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY

Wages data crucial factor for RBA interest rates decision

Original article by John Kehoe, Vesna Poljak
The Australian Financial Review – Page: 8 : 14-Nov-18

The general consensus of economists is for annual wage price index growth of 2.3 per cent when official data for the September quarter is released on 14 November. Paul Bloxham of HSBC says the Reserve Bank could potentially increase the cash rate sooner than expected if WPI growth is stronger than expected. HSBC forecasts that the cash rate will be increased in mid-2019, although financial markets generally do not expect a rate rise until at least November.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. FAIR WORK COMMISSION

RBA says it’s all systems go for booming economy

Original article by David Uren
The Australian – Page: 1 & 2 : 7-Nov-18

The Reserve Bank of Australia is upbeat about the outlook for the domestic economy, forecasting growth of 3.5 per cent in 2018 and 2019. The central bank also expects the unemployment rate to fall to 4.75 per cent over the next two years, while inflation is forecast to rise above its target range in 2019 to an average of 2.25 per cent. Meanwhile, RBA governor Philip Lowe says growth in wages will be gradual. The RBA has again left interest rates on hold, and financial markets do not anticipate any change in monetary policy until 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Reserve Bank board weigh up trifecta of risks for pre-Cup announcement

Original article by Jessica Irvine
The Sydney Morning Herald – Page: 9 : 6-Nov-18

The Reserve Bank of Australia is widely expected to leave official interest rates on hold at 1.5 per cent on 6 November. The central bank’s board will consider factors such as subdued wages growth, falling house prices and the high level of household debt in its monetary policy deliberations. The RBA has left the cash rate unchanged on Melbourne Cup Day every year since 2011, and the general consensus of economists is that rates will remain on hold in 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, MERRILL LYNCH (AUSTRALIA) PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE TREASURY

Stubbornly low inflation confounds RBA

Original article by Michael Roddan
The Australian – Page: 2 : 1-Nov-18

Official data shows that Australia’s headline inflation rate fell to 1.9 per cent in the year to September, compared with 2.1 per cent in the year to June. The underlying inflation rate has fallen to 1.7 per cent. The CPI figures show that an increase in the cost of utilities, tobacco and petrol in the September quarter was offset by a 12 per cent decline in childcare costs following changes to federal subsidies. Despite the fact that inflation is now below the Reserve Bank’s target range of 2-3 per cent, most economists do not expect an increase in official interest rates until at least the end of 2019.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD