BANKS AND BANKING

Investors expect US rate hike path to slow

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Original article by Karen Maley
The Australian Financial Review – Page: 24 : 15-Dec-17

Financial markets had generally expected the US Federal Reserve to increase interest rates in December, but Federal Open Market Committee members Charles Evans and Neel Kashkari voted against tightening monetary policy. The latter had also voted against the previous rate increases in March and June, although Evans had been expected to vote in favour of a rate rise. Meanwhile, the Federal Reserve still expects inflation to remain below its target of two per cent until 2019, while it has reiterated its expectations of three rate rises in 2018.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, FEDERAL RESERVE BANK OF MINNEAPOLIS

Jobs surge supports RBA’s growth forecasts

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Original article by David Rogers
The Australian – Page: 27 : 15-Dec-17

The latest jobs data may strengthen the case for the Reserve Bank of Australia to begin lifting the cash rate in late 2018. Some 62,000 jobs were created in November, and 383,000 in the last year, while the unemployment rate was steady at 5.4 per cent. The Australian Bureau of Statistics data also supports the central bank’s view that economic growth will be above its trend rate in 2018. However, Tom Kennedy of JP Morgan says the RBA is likely to keep interest rates on hold while the unemployment rate remains at its current level, while George Tharenou of UBS does not expect a rate rise until 2019.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

House prices to fall further: economists

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 6 : 5-Dec-17

UBS says the Reserve Bank of Australia is unlikely to reduce official interest rates in the near-term, despite data showing that house prices in Sydney fell by 1.3 per cent in the three months to November. UBS notes that in the past the RBA has frequently reduced the cash rate in response to a sharp fall in house prices. The firm adds that a further downturn in house prices is likely. Meanwhile, LF Economics expects the royal commission into the banking sector to have a significant impact on house prices.

CORPORATES
UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, LF ECONOMICS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

OECD urges RBA to start lifting rates

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 29-Nov-17

The OECD expects the Reserve Bank of Australia to lift interest rates in the second half of 2018, even if the inflation rate remains within the RBA’s target of two to three per cent. The OECD argues that rates will need to be increased in order to address concerns about Australia’s debt levels and to dampen down its housing market. The OECD has also called on the federal government to stick to its goal of improving the budget.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Sydney’s superstar house prices explained

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 : 23-Nov-17

Reserve Bank governor Philip Lowe says there are certain cities whose house prices increase a lot more than other cities in their countries. Lowe says this trend has been observed by his colleagues at other central banks, and the general consensus is that people are willing to pay higher prices for houses in some cities because of increased "economic or social returns" to be gained by living in them . Such places have been dubbed "superstar" cities, and Lowe says they include cities such as Sydney, Melbourne, Vancouver, Toronto, and San Francisco

CORPORATES
RESERVE BANK OF AUSTRALIA, ST GEORGE BANK LIMITED, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD

Signs of life in corporate investment: RBA

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Original article by David Rogers, James Glynn
The Australian – Page: 28 : 14-Nov-17

The Reserve Bank’s deputy governor Guy Debelle has told the UBS Australasia Conference that business investment outside of Australia’s mining sector has been stronger than official figures suggest in the last several years. He said the services sector in particular has recorded strong growth in capital investment, while there has also been an increase in public investment in infrastructure. Meanwhile, Debelle noted that a rise in the cash rate will be dependent on an increase in wages and inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

RBA can just sit back and watch the Fed

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Original article by Karen Maley
The Australian Financial Review – Page: 30 : 13-Nov-17

The latest monetary policy statements of the Reserve Bank and the Federal Reserve used identical wording to describe the current state of the Australian and US economies. The Federal Reserve is widely tipped to increase official interest rates again in December, which will allow the Reserve Bank to observe the impact of a rate rise in a low-inflation, low wages growth environment before taking any action of its own. There is no pressing need for the Reserve Bank to act, given that the unemployment rate remains well above that of the US and is not expected to fall in the next two years.

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

Growth hopes up as rates stay low

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Original article by David Uren
The Australian – Page: 2 : 8-Nov-17

Financial markets expect the Reserve Bank of Australia to leave official interest rates at 1.5 per cent until the second half of 2018, after it made no change to monetary policy on 7 November. RBA governor Philip Lowe noted that business conditions are improving, particularly the outlook for business investment in non-mining sectors of the economy. He also said growth in wages will remain low in the near-term but an upturn in the labour market will eventually have a flow-on effect, while he has forecast a further decline in the unemployment rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 200 INDEX

Donald Trump nominates Jerome Powell as Fed chair

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Original article by Kate Davidson, Peter Nicholas
BBC.com – Page: Online : 3-Nov-17

US President Donald Trump has nominated Jerome Powell to succeed Janet Yellen as chair of the Federal Reserve. He is widely tipped to maintain the Federal Reserve’s current approach to tightening monetary policy, and financial market experts are generally supportive of the decision to select Powell over the other four candidates for the role, who included Yellen. Powell’s appointment must be confirmed by the Senate.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

BoE raises rates for the first time in a decade, but the pound tumbles

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Original article by
abc.net au – Page: Online : 3-Nov-17

The British pound has fallen against the US and Australian currencies in response to the Bank of England’s decision to increase its benchmark interest rate by 25 basis points to 0.5 per cent. It was the central bank’s first increase in official interest rates since 2007, and two members of its Monetary Policy Committee voted against a rate rise amid concerns about sluggish growth in wages and the economy.

CORPORATES
BANK OF ENGLAND, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK