BANKS AND BANKING

All eyes on Fed’s expected interest rate rise

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Original article by John Kehoe
The Australian Financial Review – Page: 27 : 13-Jun-17

Financial market pricing indicates that the US Federal Reserve is almost certain to increase official interest rates in June 2017. Data showing that the US unemployment rate fell to a 16-year low in May will strengthen the case for a rate rise. Meanwhile, market watchers will be seeking guidance from the central bank on its plans to reduce its balance sheet, which has risen to $US4.5trn as a result of quantitative easing measures.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, THE GOLDMAN SACHS GROUP INCORPORATED, CITIBANK LIMITED, NASDAQ COMPOSITE INDEX, FACEBOOK INCORPORATED, AMAZON.COM INCORPORATED, APPLE INCORPORATED, ALPHABET INCORPORATED, GOOGLE INCORPORATED, NETFLIX INCORPORATED, CME GROUP INCORPORATED, RBC CAPITAL MARKETS

Outlook ‘tough’ as economy slows

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Original article by David Rogers
The Australian – Page: 17 & 27 : 8-Jun-17

Data from Credit Suisse shows that financial markets expect the cash rate to remain on hold in the next 12 months, following the release of the latest GDP data. The economy expanded by just 0.3 per cent in the March 2017 quarter, and year-on-year growth fell to an eight-year low of 1.7 per cent. The data will cast doubt on the Reserve Bank’s forecast of calendar year economic growth of 2.5-3.5 per cent. The Commonwealth Bank notes that the central bank will be adverse to easing the cash rate, as doing so could further inflate house prices.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ROYAL BANK OF CANADA, GOLDMAN SACHS AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, TELSTRA CORPORATION LIMITED – ASX TLS, TOLL HOLDINGS LIMITED, GOODMAN GROUP – ASX GMG

Reserve takes hands off the growth lever

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Original article by David Rogers
The Australian – Page: 19 & 28 : 7-Jun-17

The Reserve Bank of Australia’s monetary policy statement for June 2017 notes that GDP growth is likely to have slowed in the March 2017 quarter. Paul Dales of Capital Economics says that while the central bank may be willing to overlook a temporary fall in GDP, a second successive quarter of weak GDP growth in June would be a concern for it. Dales expects the RBA to leave official interest rates unchanged at 1.5 per cent for the rest of 2017, after doing so in June.

CORPORATES
RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, CITIGROUP PTY LTD, BARCLAYS BANK PLC, ABERDEEN ASSET MANAGEMENT LIMITED

Fed expects to raise short-term rates soon

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Original article by Nick Timiraos
The Australian – Page: 30 : 26-May-17

Speculation that the US Federal Reserve will increase interest rates in June 2017 has gathered pace following the release of the minutes from its policy meeting for May. The minutes show that a majority of board members feel that the economic outlook may soon justify an increase in short-term interest rates. Futures traders now consider the chances of a rate rise in June to be about 80 per cent. Meanwhile, the central bank has issued a staff briefing which looks at options for reducing its balance sheet, which has risen to $US4.5trn as a result of quantitative easing.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX

Upbeat RBA signals end to cuts

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Original article by David Rogers
The Australian – Page: 27 : 3-May-17

The Reserve Bank of Australia’s decision to leave official interest rates unchanged on 2 May was widely expected. However, an upbeat outlook for the domestic and global economies has prompted speculation that there will be no more rate cuts in the current monetary policy cycle. RBA governor Philip Lowe noted that the resource sector’s exports are rising while higher commodity prices are resulting in an increase in national income.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX

Rate hikes deferred by slow US growth

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Original article by Myriam Robin
The Australian Financial Review – Page: 20 : 1-May-17

The Federal Reserve is tipped to leave interest rates on hold in May 2017, in the wake of GDP data showing that US economic growth slowed to a three-year low of 0.7 per cent in the March quarter. Some 70 per cent of futures traders expect the Federal Reserve to tighten monetary policy in June. The Reserve Bank of Australia is also expected to leave rates on hold in May, and Paul Brennan of Citigroup says the central bank’s revised quarterly forecasts are unlikely to be unduly affected by data showing that inflation is within its target range.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, THINKMARKETS, REUTERS HOLDINGS PLC, SOCIETE GENERALE SA

Rise in inflation puts squeeze on households

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 27-Apr-17

Financial markets believe there is little chance of an official interest rate cut in May 2017, following the release of CPI data for the March quarter. The headline inflation rate was 2.1 per cent year-on-year during the quarter, compared with 1.5 per cent previously. The inflation rate is now within the Reserve Bank’s target range of 2-3 per cent for the first time since late 2014. An increase in gas prices contributed to the rise in the inflation rate, which is now outpacing wages growth.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, STANDARD AND POOR’S ASX 200 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Inflation will decide the rate debate

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Original article by Philip Baker
The Australian Financial Review – Page: 30 : 26-Apr-17

Investors will be awaiting the release of Australia’s CPI data for the March 2017 quarter, which may influence the timing of any change to monetary policy. The headline inflation rate is widely tipped to have risen by 2.2 per cent year-on-year, which would be the first time that inflation has been within the Reserve Bank’s target range of 2-3 per cent since the September 2014 quarter. However, the underlying inflation rate for the year to March is expected to be around 1.8 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, WOOLWORTHS LIMITED – ASX WOW

Split emerges on interest rates forecast

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Original article by Jessica Sier
The Age – Page: 20 : 22-Dec-16

Westpac and ANZ Bank economists expect Australia’s cash rate to remain unchanged in 2017, while National Australia Bank suggests that there is potential for two rate cuts. Financial markets have responded to the release of the minutes of Reserve Bank’s December 2016 board meeting by lifting the chances of a rate rise in 2017 from 40 per cent to 55 per cent. The minutes show that the central bank is concerned about the residential property market and the level of household debt.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UNITED STATES. FEDERAL RESERVE BOARD

Central bank signals more hikes next year

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Original article by Harriet Torry
The Australian – Page: 30 : 16-Dec-16

The yield on 10-year US treasuries rose to 2.523 per cent and the Dow Jones Industrial Average retreated after the Federal Reserve indicated that it is likely to lift the cash rate by 75 basis points in 2017. The central bank had been widely tipped to raise the cash rate by 25 basis points in December 2016, but policymakers had signalled in September that rates were likely to rise just twice in 2017. Federal Reserve officials have cited the outlook for inflation and the improving labour market as factors that prompted only the second rate rise in the last decade. Originally published in "The Wall Street Journal".

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, JP MORGAN CHASE AND COMPANY, WELLS FARGO BANK, BANK OF AMERICA CORPORATION, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, NAVY FEDERAL CREDIT UNION, MORTGAGE BANKERS’ ASSOCIATION OF AMERICA, FIRST PORTLAND MORTGAGE CORPORATION, ALASKA RETIREMENT MANAGEMENT BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT