BANKS AND BANKING

Rates low enough to spur growth: RBA

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Original article by David Rogers
The Australian – Page: 28 : 5-Oct-16

Financial markets have priced in a 20 per cent chance that the Reserve Bank of Australia will reduce the cash rate in November 2016. The central bank left official interest rates on hold at 1.5 per cent on 4 October, and governor Philip Lowe said the board decided that the cash rate is at an appropriate level to deliver sustainable economic growth and meet the bank’s inflation target over the long-term. Lowe’s statement notably made no reference to the upcoming release of inflation data.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, CORELOGIC AUSTRALIA PTY LTD, JP MORGAN AUSTRALIA LIMITED

No rate cut likely as surveys back inaction

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Original article by David Uren
The Australian – Page: 2 : 4-Oct-16

The Reserve Bank of Australia is widely tipped to leave the cash rate unchanged on 4 October 2016. The findings of the Australian Industry Group’s latest manufacturing survey support the case for rates to be left on hold. It shows that business conditions improved in key sectors of the manufacturing industry during September. Other recent surveys has also been upbeat about business conditions.

CORPORATES
RESERVE BANK OF AUSTRALIA, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, DUN AND BRADSTREET (AUSTRALIA) PTY LTD

Lowe: RBA can only do so much

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 23-Sep-16

Reserve Bank of Australia governor Philip Lowe sees the role of the central bank as primarily dealing with inflation. He told members of the House of Representatives economics committee in Sydney on 22 September 2016 that interest rate cuts can only have a limited impact on the property market. Lowe said house prices are high because of inadequate supply and easy access to credit.

CORPORATES
RESERVE BANK OF AUSTRALIA

Investors warned not to expect smooth ride

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 23-Sep-16

Australian equity strategists are cautious about the near-term outlook for the domestic bourse, with most still expecting the S&P/ASX 200 to be trading at around the 5,500-point level at the end of 2016. Meanwhile, Tony Brennan of Citigroup forecasts that the benchmark index will top 5,750 points by mid-2017. With the US Federal Reserve opting to leave interest rates on hold in September, David Cassidy of UBS says the presidential election could influence the timing of the next interest rate move.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Why investors and economists differ on odds of rate call

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 22-Sep-16

Financial markets consider that there is a near-even chance that the Reserve Bank of Australia will reduce the cash rate in the first half of 2017. In contrast, the general consensus of economists is that there will be at least one more rate cut in the current monetary policy easing cycle. JP Morgan economist Tom Kennedy expects the central bank to reduce the cash rate by another 50 basis points, while James Woods of Rivkin Securities suggests that there are limits to what monetary policy can achieve in terms of economic stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, RIVKIN SECURITIES PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Investors face nervous wait ahead of rate calls

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Original article by Patrick Commins
The Australian Financial Review – Page: 19 : 19-Sep-16

The upcoming monetary policy meetings of the US Federal Reserve and the Bank of Japan will be a focus for Australian investors in the week beginning 19 September 2016. Futures markets have priced in a 20 per cent chance that the Federal Reserve will increase the cash rate, and Paul Ashworth of Capital Economics says a rate rise in December is more likely. The minutes from the Reserve Bank of Australia will also be released, and Philip Lowe will appear before Parliament for the first time in his new role of RBA governor.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, RESERVE BANK OF NEW ZEALAND, STANDARD AND POOR’S ASX 200 INDEX, WESTPAC BANKING CORPORATION – ASX WBC, AMP CAPITAL INVESTORS LIMITED, EUROPEAN CENTRAL BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Formidable barriers mean Fed’s rate rise is no-go next week

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Original article by Karen Maley
The Australian Financial Review – Page: 28 : 16-Sep-16

Financial market traders have priced in a 15 per cent chance that the Federal Reserve will increase US interest rates in September 2016. Rates have increased just twice in the past when the odds of a rise have been 20 per cent or less. Unlike at present, inflation was a key issue on both occasions. Meanwhile, opinion is divided among Federal Reserve policymakers regarding the timing of a rate rise, while the central bank is unlikely to increase the cash rate prior to the presidential election in November.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Fund managers to Fed: it’s time to raise rates

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 & 27 : 14-Sep-16

Financial markets have priced in a 22 per cent chance that the US Federal Reserve will increase interest rates in September 2016, while a December increase is rated a 57 per cent chance. PM Capital’s Uday Cheruvu expects the US central bank to tighten monetary policy at some point, noting that there are sufficient grounds for a rate rise. Meanwhile, Randal Jenneke of T. Rowe Price says Australian yield stocks – which bore the brunt of bearish sentiment on 12 September – are likely to fall further.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, PM CAPITAL LIMITED, T ROWE PRICE GROUP INCORPORATED, STANDARD AND POOR’S ASX 200 INDEX, EUROPEAN CENTRAL BANK, BANK OF JAPAN, BANK OF ENGLAND

Central bank fears spook markets

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Original article by Jacob Greber, Sally Rose, Jessica Sier
The Australian Financial Review – Page: 1 & 6 : 12-Sep-16

Australia’s S&P/ASX 200 Index has shed 4.4 per cent since the start of August 2016, and a 2.5 per cent downturn in the S&P 500 is expected to push the local market lower on 12 September. The US market was sold down after a Federal Reserve official suggested that the strength of the US economy could warrant an interest rate cut in the near-term. This prompted renewed support for the US dollar and a sharp rise in bond yields. Meanwhile, Nick Bishop of Aberdeen Asset Management expects an upturn in global financial market volatility in the December quarter.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, ABERDEEN ASSET MANAGEMENT LIMITED, CITIGROUP PTY LTD, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED, EUROPEAN CENTRAL BANK, RESERVE BANK OF AUSTRALIA