BANKS AND BANKING

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

Reserve in no hurry to lift rates

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Original article by David Uren
The Australian – Page: 2 : 18-Oct-17

The minutes of the Reserve Bank of Australia’s board meeting for October suggest that the cash rate will remain at 1.5 per cent for some time. The central bank stresses that while the global trend toward monetary policy tightening is a "welcome development", it has no implications for Australian interest rates, which stayed much higher than in many nations in the wake of the global financial crisis. Meanwhile, the RBA anticipates that inflation will gradually move towards its target range.

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

Yellen defends Fed’s gradual rate rise plan

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Original article by David Harrison
The Australian – Page: 28 : 28-Sep-17

Financial markets have priced in a 77.9 per cent chance of a rise in US interest rates in December following a speech by Federal Reserve chair Janet Yellen, compared with 72.8 per cent previously. The central bank has flagged one more rate rise in 2017 and further tightening of monetary policy over the next several years. However, Yellen has told a conference that the outlook for inflation will influence how rapidly interest rates are increased. Inflation has remained below the Federal Reserve’s target of two per cent for some time.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL ASSOCIATION FOR BUSINESS ECONOMICS, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE BANK OF CHICAGO