BANKS AND BANKING

Stability for Lowe’s first year at helm

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Original article by Philip Baker
The Australian Financial Review – Page: 36 : 6-Sep-17

Official interest rates have remained unchanged at 1.5 per cent during Philip Lowe’s first year as Reserve Bank of Australia governor. In contrast, the cash rate rose by 0.5 per cent during the first 12 months’ tenure of his predecessor, Glenn Stevens. Meanwhile, the next change in monetary policy is likely to be a rise in interest rates, although a number of economic indicators suggest that rates may stay on hold until late 2018.

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

Inflation data will be key to whether Fed can hike

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Original article by Brian Chappatta
The Australian Financial Review – Page: 20 : 7-Aug-17

New data shows that a higher-than-expected 209,000 jobs were created in the US during July, while the unemployment rate was at a 16-year low. However, the upcoming release of US inflation data is likely to influence the timing of any change in monetary policy by the Federal Reserve. Bill Gross of the Janus Henderson Global Unconstrained Bond Fund says the central bank is unlikely to increase short-term interest rates until the core inflation rate rises to its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, JANUS HENDERSON GLOBAL UNCONSTRAINED BOND FUND, BMO CAPITAL MARKETS, BANK OF AMERICA CORPORATION, TD SECURITIES, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE BANK OF MINNEAPOLIS

Rising dollar a threat to economy: RBA

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Original article by James Glynn
The Australian – Page: 27 : 2-Aug-17

The Reserve Bank still expects GDP growth to return to three per cent and inflation to rise to within its target range. However, these forecasts are being hindered by the continued strength of the Australian dollar, which has been noted by central bank governor Philip Lowe. He is upbeat about the outlook for the labour market, forecasting that the unemployment rate will ease in the next several years. Meanwhile, Michael Blythe of the Commonwealth Bank expects the cash rate to remain on hold until at least late 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED, COMMONWEALTH SECURITIES LIMITED

RBA rate hike hopes fade as Aussie bumps past US80c

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Original article by Vesna Poljak
The Australian Financial Review – Page: 15 : 28-Jul-17

The Australian dollar reached a new two-year high of US0.8043 during intra-day trading on 27 July, compared with $US0.76 at the start of the month. The currency rallied after the US Federal Reserve left interest rates on hold, and Charlie Jamieson of Jamieson Coote Bonds says a US rate rise in September is looking increasingly unlikely, while a rise in Australia’s cash rate will also be off the agenda in the near-term. Meanwhile, Westpac estimates that the Australian dollar’s fair value is around $US0.76 to $US0.77.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, JAMIESONCOOTEBONDS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, FEDERAL RESERVE BANK OF ATLANTA

RBA dampens rate cut hopes

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Original article by David Rogers
The Australian – Page: 17 & 28 : 27-Jul-17

Reserve Bank of Australia governor Philip Lowe has signalled that the central bank will maintain its inflation target of 2-3 per cent. Meanwhile, new data shows that CPI growth in the June quarter was below expectations at 1.9 per cent, although growth in core inflation was in line with forecasts at 1.8 per cent. Shane Oliver of AMP Capital expects the RBA to leave the cash rate at 1.5 per cent until at least the end of 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, AUSTRALIAN BUREAU OF STATISTICS, THE ANIKA FOUNDATION

As good as it gets for the Australian dollar?

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Original article by Jens Meyer
The Australian Financial Review – Page: 20 : 25-Jul-17

A speech by Reserve Bank of Australia governor Philip Lowe on 26 July is likely to be closely scrutinised after recent commentary on a neutral interest rate target prompted the Australian dollar to rally. The currency peaked at a two-year high in response, although it retreated after deputy governor Guy Debelle downplayed the discussions about neutral rates. Paul Dales of Capital Economics expects the dollar to come under downward pressure, citing factors such as the outlook for interest rates and the iron ore price.

CORPORATES
RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, AXITRADER PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, OANDA AUSTRALIA PTY LTD

Job surge adds to dollar’s strength

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Original article by David Rogers
The Australian – Page: 30 : 21-Jul-17

The Australian dollar peaked at a two-year high of $US0.7989 in local trading on 20 July, in response to data showing that 62,000 full-time jobs were created in June. The economy added a net 14,000 jobs, due to a sharp fall in part-time positions, and the unemployment rate was steady at 5.6 per cent. Capital Economics’ Katie Hickie says the Reserve Bank is likely to leave official interest rates on hold until at least the end of 2018, arguing that growth in wages will be limited by excess capacity in the labour market.

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

RBA sending a warning shot on rates: Edwards

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Original article by David Rogers
The Australian – Page: 17 & 28 : 20-Jul-17

Economist John Edwards recently suggested that Australia’s economic outlook could potentially prompt the Reserve Bank to lift the cash rate from 1.5 per cent to 3.5 per cent by the end of 2019. The minutes of the central bank’s latest board meeting indicate that it now has a "neutral" nominal cash rate target of 3.5 per cent. Edwards says it is quite possible that official interest rates could rise to this level, and he anticipates a rate rise in March 2018. Paul Bloxham of HSBC forecasts a rate increase in the March 2018 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, DEUTSCHE BANK AG, GOLDMAN SACHS AUSTRALIA PTY LTD, LOWY INSTITUTE FOR INTERNATIONAL POLICY

RBA signals cash rate rise to 3.5pc

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 19-Jul-17

The minutes of the Reserve Bank of Australia’s monthly board meeting for July show that it now has a neutral cash rate target of 3.5 per cent, compared with a cash rate of 1.5 per cent at present. Financial markets increased the chances of an interest rate rise in May 2018 to 91 per cent in response to the release of the minutes, which also made reference to economic indicators such as a downturn in unemployment and growth in infrastructure investment.

CORPORATES
RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD, GOLDMAN SACHS AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Fed chief says increasing prices will allow rate rises

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Original article by Nick Timiraos
The Australian – Page: 27 : 14-Jul-17

The general expectation of financial markets is that the Federal Reserve will increase US interest rates again in December 2017. Federal Reserve chair Janet Yellen has told Congress that it is too soon to suggest that the US inflation rate will reach two per cent in coming years. She added that the central bank will maintain its current stand on gradually lifting the cash rate unless inflation remains persistently below its target of two per cent.

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