BANKS AND BANKING

Next rates move still up, RBA insists

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Original article by David Rogers, James Glynn
The Australian – Page: 19 & 28 : 6-Feb-19

The Reserve Bank of Australia has downgraded its forecast for economic growth in 2019 from 3.25 per cent to around three per cent, after leaving the cash rate unchanged at 1.5 per cent. The central bank has also advised that it now expects the unemployment rate to fall to around 4.75 per cent over the next several years, while it forecasts an underlying inflation rate of two per cent in 2019. Analysts expect official interest rates to remain on hold for some time.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, AUSTRALIAN BUREAU OF STATISTICS

Forecasters tipping RBA will cling to its tightening bias

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Original article by Vesna Poljak
The Australian Financial Review – Page: 22 : 4-Feb-19

Andrew Ticehurst of Nomura expects the Reserve Bank of Australia’s board to retain its bias toward tightening monetary policy when it meets on 4 February. Ticehurst also forecasts that the central bank will scale back its economic growth and inflation forecasts. The general consensus of economists is that the RBA will leave the cash rate unchanged at 1.5 per cent throughout 2019, although financial markets have priced in the chance of a rate cut late in the year.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, RBC CAPITAL MARKETS, WESTPAC BANKING CORPORATION – ASX WBC, MARKET ECONOMICS PTY LTD, AMP CAPITAL INVESTORS LIMITED, INDUSTRY SUPER AUSTRALIA PTY LTD, CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Fed puts the brakes on interest rates

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Original article by Nick Timiraos
The Australian – Page: 28 : 1-Feb-19

Wall Street rallied and US bond yields fell after the Federal Reserve left the cash rate on hold at its first monetary policy meeting for 2019 and signalled that further rate rises are off the agenda in the near-term. The central bank had increased the federal funds rate in December and flagged two rate rises in 2019. Federal Reserve chairman Jerome Powell has identified a number of potential risks to the US economy that contributed to the decision to announce an interest rate pause.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, GRANT THORNTON INTERNATIONAL

Rates rise tipped but not soon

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Original article by James Glynn
The Australian – Page: 27 : 31-Jan-19

There is general consensus in financial markets that the Reserve Bank of Australia will keep official interest rates on hold at 1.5 per cent in February. However forme RBA board member John Edwards says the next movement in the cash rate will be up rather than down, although this is will not happen in the near-term. He adds that the RBA’s economic growth and inflation forecasts for 2019 are "quite plausible".

CORPORATES
RESERVE BANK OF AUSTRALIA

Next rates move will be up: RBA’s Harper

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Original article by James Glynn
The Australian – Page: 24 : 30-Jan-19

Reserve Bank of Australia board member Ian Harper has downplayed suggestions that the central bank could further reduce the cash rate. He says the strength of the domestic economy means that interest rates will rise, but stresses that this is his personal view. Meanwhile, Harper adds that there are no indications as yet that the downturn in residential property prices has prompted consumers to reduce their spending. Financial markets have priced in a better-than-even chance that the RBA will reduce the cash rate during 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL, COMMONWEALTH SECURITIES LIMITED

RBA will ignore gloom and stay a growth hawk

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Original article by James Glynn
The Australian – Page: 23 : 25-Jan-19

The Reserve Bank of Australia is tipped to scale back its economic growth forecasts for 2019 and 2020, after GDP growth was just 2.8 per cent year-on-year in the December 2018 quarter. The RBA had previously forecast growth of 3.5 per cent for 2018. However, the central bank is expected to maintain its hawkish stance, given that the unemployment rate eased in December. The strong labour market also means an increase in the cash rate is more likely than a cut.

CORPORATES
RESERVE BANK OF AUSTRALIA

Fed will take a break from rate hikes: Yellen

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Original article by Joyce Moullakis
The Australian – Page: 13 & 18 : 8-Jan-19

The Federal Reserve raised US interest four times in 2018, and former chair Janet Yellen says another one or two rate rises may be necessary to prevent the economy from overheating. However, Yellen has told a conference in China that she does not expect the central bank to tighten monetary policy again immediately. Yellen’s successor Jerome Powell has signalled that the Federal Reserve will be flexible in its approach to monetary policy in 2019.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, UBS AG, AMERICAN ECONOMIC ASSOCIATION, PEOPLE’S BANK OF CHINA, EUROPEAN CENTRAL BANK, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Economists push rate rise to 2020

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 16 : 2-Jan-19

The latest quarterly survey of economists shows that the general consensus is that the Reserve Bank will leave official interest rates on hold until mid-2020. Previous expectations were for a rate rise in the second half of 2019. However, Shane Oliver of AMP Capital is one of three economists who expect the central bank to reduce the cash rate in 2019. Meanwhile, the US Federal Reserve is now widely tipped to increase interest rates twice in 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, INDUSTRY SUPER AUSTRALIA PTY LTD, MARKET ECONOMICS PTY LTD, MOODY’S ANALYTICS AUSTRALIA PTY LTD, RBC CAPITAL MARKETS, UNIVERSITY OF TECHNOLOGY, SYDNEY, UNITED STATES. FEDERAL RESERVE BOARD, MACQUARIE GROUP LIMITED – ASX MQG, QIC LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Fed rate hike roils global markets

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Original article by David Rogers
The Australian – Page: 15 & 21 : 21-Dec-18

Australia’s benchmark S&P/ASX 200 has shed 9.2 per cent so far in 2018, and 11 per cent during the current quarter. The local market’s 1.3 per cent fall on 20 December was accompanied by large falls across Asia, while the Australian dollar reached a low of $US.7086 and the yield on 10-year Australian bonds fell to 2.3 per cent. Financial markets believe that the US Federal Reserve made a policy mistake in signalling further monetary policy tightening over the next few years and it may have to reduce interest rates within two years.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, PEPPERSTONE FINANCIAL PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, NIKKEI 225 INDEX, STANDARD AND POOR’S 500 INDEX, BLOOMBERG LP, OANDA AUSTRALIA PTY LTD, MAGELLAN FINANCIAL GROUP LIMITED – ASX MFG, WAM CAPITAL LIMITED – ASX WAM, MORNINGSTAR PTY LTD, PLATYPUS ASSET MANAGEMENT PTY LTD, ECP ASSET MANAGEMENT PTY LTD, HYPERION ASSET MANAGEMENT LIMITED

RBA to cut its 3.25pc growth forecast, economists say

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Original article by Tim Boyd
The Australian Financial Review – Page: 6 : 20-Dec-18

Janu Chan of St George Bank is among the economists who expect the Reserve Bank of Australia to scale back its economic growth forecast of 3.25 per cent for 2018-19 at its first board meeting in 2019. This follows lower-than-expected GDP growth for the September quarter. The central bank’s monetary policy meeting in February will take into account the latest inflation and employment data.

CORPORATES
RESERVE BANK OF AUSTRALIA, ST GEORGE BANK LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ