BANKS AND BANKING

No RBA rate hikes for a year

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Original article by Vesna Poljak, Sarah Turner
The Australian Financial Review – Page: 1 & 20 : 2-Jul-18

A quarterly survey of economists shows that the general consensus is that the Reserve Bank of Australia will leave interest rates on hold at 1.5 per cent until June 2019. The cash rate is now expected to reach two per cent by the end of 2019. However, former ANZ Bank chief economist Warren Hogan expects one rate increase by mid-2019, arguing that the RBA needs to begin the process of normalising monetary policy. Matthew Peter of QIC also expects one rate rise in the next 12 months.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, QIC LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY, BANK FOR INTERNATIONAL SETTLEMENTS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UNITED STATES. FEDERAL RESERVE BOARD, IFM INVESTORS PTY LTD, MARKET ECONOMICS PTY LTD, LAMINAR CAPITAL, CAPITAL ECONOMICS LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, EUROPEAN CENTRAL BANK

RBA sidelined as cost of money rises

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 28-Jun-18

Futures market pricing suggests that investors expect the Reserve Bank of Australia to keep official interest rates on hold until late 2019. However, the gap between the cash rate and the bank bill swap rate has increased to 61 basis points, compared with an average of 18 basis points for much of the last decade. The rise in the BBSW may eventually prompt Australia’s major banks to increase their mortgage interest rates independently of the RBA, with several of the nation’s smaller lenders having already done so.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF QUEENSLAND LIMITED – ASX BOQ, ME BANK, AMP BANK LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IFM INVESTORS PTY LTD

Digital cash not on RBA agenda

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Original article by David Swan
The Australian – Page: 29 : 27-Jun-18

The Reserve Bank of Australia’s head of payments policy has downplayed the prospect that the central bank will introduce a digital version of the Australian dollar. Tony Richard says the RBA does not believe that there would be sufficient demand for a digital currency at present. He adds that a digital currency would have implications for the RBA’s financial stability mandate and the structure of the financial sector. Several fintech companies advocated the introduction of a digital Australian dollar in 2017.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINTECH AUSTRALIA PTY LTD, AGRIDIGITAL, OTHERA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED

Plea to end unhealthy RBA cash rate

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 26-Jun-18

Economists James Morley from the University of Sydney and Mark Crosby of Monash University say the Reserve Bank of Australia needs to increase official interest rates. Crosby says the cash rate is at an "unhealthy level" at just 1.5 per cent and it is safe to begin tightening monetary policy. Morley argues that there is scope for at least two rate rises without having any adverse impact on the economy. Former RBA board member Warwick McKibbin has called for an increase in the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNIVERSITY OF SYDNEY, MONASH UNIVERSITY, AUSTRALIAN NATIONAL UNIVERSITY, GOLDMAN SACHS AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

RBA’s Lowe urged to raise rates

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 25-Jun-18

The general consensus of market economists is that the Reserve Bank of Australia should leave official rates on hold at 1.5 per cent for the rest of 2018 and most of 2019. However, former RBA board member Warwick McKibbin says the central bank should increase the cash rate by at least 25 basis points, as interest rates are beginning to rise globally. He also argues that the RBA should gradually shift its focus from an inflation target of 2-3 per cent toward a nominal income target.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF NEW YORK, EUROPEAN CENTRAL BANK, AUSTRALIAN NATIONAL UNIVERSITY, THE BROOKINGS INSTITUTION

RBA to keep interest rates on hold until 2020: Macquarie

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Original article by Patrick Commins
The Australian Financial Review – Page: 31 : 22-Jun-18

Macquarie Group economists Ric Deverell and Justin Fabo forecast that Australia’s unemployment rate will not fall below five per cent until 2020. They warn that "persistent" spare capacity in the economy will ensure that wages growth remains subdued in the near-term. As a result, they do not expect the Reserve Bank to tighten monetary policy until at least 2020. However, they note that a number of domestic and international factors could affect the timing of an interest rate rise.

CORPORATES
RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG

Fed hikes put squeeze on banks

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Original article by Karen Maley
The Australian Financial Review – Page: 1 & 28 : 15-Jun-18

The US Federal Reserve has signalled that two more interest rate increases are likely in 2018, following its second rate rise for the year. The new target range for the federal funds rate is between 1.75% and 2%, while the Reserve Bank of Australia has kept its cash rate at 1.5% for almost two years. The divergence in monetary policy has coincided with rising wholesale borrowing costs for Australia’s major banks, as well as a recent spike in the bank bill swap rate. Shane Oliver of AMP says local banks could potentially respond by increasing their mortgage rates on investment and interest-only loans.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCIAL STABILITY BOARD, DEUTSCHE BANK AG, SOCIETE GENERALE SA, BNP PARIBAS SA, GRUPO SANTANDER

House prices ‘won’t sway the RBA’

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Original article by James Glynn
The Australian – Page: 17 & 28 : 29-May-18

Reserve Bank of Australia board member Ian Harper says factors such as the low growth in wages means the central bank is unlikely to increase official interest rates in the near-term. He adds that slowing growth in residential property prices will also not influence the timing of a rise in the cash rate. Financial markets do not expect monetary policy to be tightened until at least late 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL

The way Australians bank

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Original article by Roy Morgan
Market Research Update – Page: Online : 7-May-18

A Roy Morgan Single Source survey shows that ATMs remain the most used banking channel in Australia, with 83.4% of Australians aged 14+ using an ATM in the year to March (down 0.8%). Internet Banking is the second most used banking channel, with 54.2% using Internet Banking in the last 12 months (down 2.0%). The rapid increase in the use of mobile banking, with its higher satisfaction levels compared to branches, appears to have affected the number who use it compared to visiting a branch. Mobile banking usage is at 46.5% (up 3.1%), beating visiting a branch at 45.1% (down 3.5%). Phone Banking also saw an increase on 2017, with 24.1% of Australians aged 14+ using Phone Banking (up 1.6%).

CORPORATES
ROY MORGAN LIMITED

Fed holds rates steady, June rise on cards

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Original article by Nick Timiraos
The Australian – Page: 34 : 4-May-18

Data from CME Group shows that most futures market traders expect the US Federal Reserve to increase interest rates in June, after the central bank left the cash rate on hold in May. However, futures traders rate the chances of monetary policy being tightened two more times beyond June at almost 50 per cent. The Federal Reserve has signalled that it will increase the cash rate gradually, despite recent data showing that inflation has reached its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, JP MORGAN CHASE AND COMPANY, DOW JONES INDUSTRIAL AVERAGE INDEX, NOMURA SECURITIES INTERNATIONAL INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT