BANKS AND BANKING

No change in rate, and RBA predicting more economic acceleration

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 2-May-18

The Reserve Bank of Australia’s decision to leave official interest rates unchanged on 1 May was widely anticipated. The cash rate has now been on hold for an unprecedented 21 months. RBA governor Philip Lowe said the central bank still expects an increase in wages and inflation to be gradual, as will a fall in the unemployment rate. However, Lowe again said the Australian economy is likely to expand by more than three per cent in 2018 and 2019, compared with just 2.4 per cent in 2017.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

RBA talks up rate rise, but not just yet

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Original article by David Rogers
The Australian – Page: 17 & 24 : 18-Apr-18

The minutes of the Reserve Bank’s latest board meeting show that board members expect monetary policy to be tightened rather than eased, although they have indicated that this is unlikely in the near-term given the outlook for inflation and unemployment. Meanwhile, Bill Evans of Westpac says the central bank is likely to downgrade its growth forecast for the Australian economy in 2018 from 3.25 per cent to three per cent in its next statement on monetary policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD, CAPITAL ECONOMICS LIMITED

First rate rise will shock, warns RBA’s Lowe

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Original article by Jacob Greber
The Australian Financial Review – Page: 10 : 12-Apr-18

Reserve Bank of Australia governor Philip Lowe has reiterated that there is likely to be a gradual increase in economic growth and wages, which should ensure that interest rates remain on hold in the near-term. Lowe also used an Australia-Israel Chamber of Commerce speech to emphasise that the cash rate is expected to rise rather than fall when the central bank next adjusts monetary policy, and he noted that interests have not risen for more than seven years. Some economists now expect the cash rate to remain at 1.5 per cent until 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA-ISRAEL CHAMBER OF COMMERCE

RBA keeps rates level for 18th meeting in row

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 4-Apr-18

The general consensus of economists is that the Reserve Bank of Australia will not tighten monetary policy until 2019, after the cash rate was left unchanged at 1.5 per cent on 3 April. RBA governor Philip Lowe again stressed that there is likely to be a gradual fall in the unemployment rate and a rise in the inflation rate to the central bank’s target range. He also said low growth in wages is likely to persist for some time. The RBA has not adjusted official interest rates since August 2016.

CORPORATES
RESERVE BANK OF AUSTRALIA, INDEED INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

US Fed set to rise further above RBA

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 32 : 23-Mar-18

The yield on US 10-year bonds has eased to 2.86 per cent in response to the Federal Reserve’s move to increase interest rates to 1.75 per cent. Kapstream Capital’s Steve Goldman expects the central bank to increase US rates to 2.5 per cent, adding that this is more likely to be in 2019 rather than 2018. The US federal funds rate is now higher than Australia’s cash rate for the first time since 2000. The interest rate differential is expected to widen, as the Federal Reserve has flagged further rate rises in 2018 and 2019. Most analysts do not expect the Reserve Bank to do so until at least the March 2019 quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, KAPSTREAM CAPITAL PTY LTD, NOMURA AUSTRALIA LIMITED, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED

RBA in no hurry to follow Fed on interest rates

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Original article by David Rogers
The Australian – Page: 27 : 21-Mar-18

The Reserve Bank of Australia has previously forecast that economic growth would average around three per cent in 2018. However, the minutes of the central bank’s latest monthly board meeting show that it expects economic growth to exceed "potential growth" in 2018. Bill Evans of Westpac notes that the Reserve Bank deems potential growth to be 2.75 per cent. Meanwhile, there seems to be little prospect of a rise in Australia’s cash rate in the near-term, while the Federal Reserve is widely tipped to increase US rates in March.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD, JP MORGAN AUSTRALIA LIMITED, CAPITAL ECONOMICS LIMITED

What would it take to get the Reserve Bank moving in 2018?

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Original article by Patrick Commins
The Australian Financial Review – Page: 27 : 8-Mar-18

There is speculation that the Reserve Bank may increase the cash rate in November 2018, although economists generally expect rates to remain on hold until 2019. Regardless, a rate rise in the near-term is unlikely, and the central bank seems certain to break its record for the longest consecutive run of board meetings with no change in monetary policy. Meanwhile, Chris Nicol and Daniel Blake of Morgan Stanley say that wages growth would be the key factor that would prompt the Reserve Bank to increase the cash rate in 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, TD SECURITIES, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

A patient RBA risks playing catch-up later

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Original article by Patrick Commins
The Australian Financial Review – Page: 21 : 19-Feb-18

Westpac estimates that there is a 60 per cent chance that the Reserve Bank will increase official interest rates in 2018. There had been general consensus in financial markets early in 2018 that a rate rise before the end of the year was almost certain, but expectations have been dampened by factors such as market volatility and the latest inflation data. However, other major central banks are tightening monetary policy, prompting some experts to warn that the Reserve Bank may need to increase rates more aggressively at some stage.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD

Rate rise likely as CPI starts to edge up

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Original article by Harriet Torry
The Australian – Page: 23 : 16-Feb-18

New figures show that the US has recorded its biggest monthly increase in inflation since March 2005. The larger-than-expected increase in January has increased the likelihood that the Federal Reserve will lift interest rates in March; the central bank considers an inflation rate of two per cent to be an indication of a healthy economy, but it does not want inflation to get much higher than that. Investors took the January inflation figures in their stride, with the Dow Jones closing up around one per cent. Originally published in "The Wall Street Journal".

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, WELLS FARGO AND COMPANY, PPG INDUSTRIES, WALT DISNEY COMPANY, AMAZON.COM INCORPORATED, SHERWIN-WILLIAMS

Low inflation, low unemployment, and Lowe restraint

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Original article by David Uren
The Australian – Page: 1 & 6 : 9-Feb-18

Reserve Bank governor Philip Lowe has indicated that an interest rate rise is now more likely than a rate cut. However, he says the central bank is unlikely to tighten monetary policy until inflation rises around the mid-point of its target range of 2-3 per cent and there is a further reduction in the unemployment rate. He has stressed that the Reserve Bank does not need to adjust monetary policy in line with other central banks. Lowe also says the Reserve Bank does not expect its inflation forecasts to be unduly affected by the recent sharemarket volatility.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD