BANKS AND BANKING

Higher dollar not enough to kill RBA’s chill

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Original article by Vanessa Desloires, Mark Mulligan
The Australian Financial Review – Page: 3 : 29-Feb-16

There is general consensus among economists that the Reserve Bank will leave the cash rate unchanged at two per cent on 1 March 2016. Shane Oliver of AMP Capital is among the economists who expect an interest rate cut at some point in 2016. Meanwhile, the Commonwealth Bank’s Michael Blythe does not expect the central bank to resume "jawboning" the Australian dollar in its monetary policy statement, despite its recent rise to a seven-week high.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NOMURA AUSTRALIA LIMITED, BETASHARES CAPITAL LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Australia at risk from hard landing in China

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 18-Feb-16

The Chinese economy expanded by just 6.9 per cent in 2015, and Oxford Economics forecasts a gradual slowing of economic growth over the next five years. However, Sian Fenner of Oxford Economics warns that Australia could face a recession in 2016 if the Chinese economy experiences a "hard landing". Fenner adds that in the event of a recession the Reserve Bank could reduce the cash rate to just 0.25 per cent, which would limit the extent of the economic downturn.

CORPORATES
OXFORD ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, AVIVA PLC, PEOPLE’S BANK OF CHINA, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

Rate cut in near future seen as unlikely

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Original article by Vanessa Desloires, Jessica Sier
The Australian Financial Review – Page: 27 : 22-Jan-16

The general consensus of Australian economists is that the Reserve Bank will leave the cash rate unchanged in February 2016. Shane Oliver of AMP is the only economist out of 14 who believes that recent financial market volatility could result in an interest rate cut. He adds that the upcoming release of inflation data for the December 2015 quarter is likely to be the deciding factor. Meanwhile, the ANZ Bank’s chief economist Warren Hogan expects the cash rate to be cut in May and August.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, BLOOMBERG LP, AUSTRALIAN BUREAU OF STATISTICS, BETASHARES CAPITAL LIMITED, BANK OF CANADA, MERRILL LYNCH (AUSTRALIA) PTY LTD, RBC CAPITAL MARKETS, CITIGROUP PTY LTD

RBA tipped to make cuts around mid-year

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Original article by Jessica Sier
The Australian Financial Review – Page: 29 : 20-Jan-16

Data from Citigroup shows that financial markets believe that the Reserve Bank of Australia is now almost certain to reduce the cash rate by 25 basis points in June 2016. There is a 20 per cent chance of a rate cut in February, and a 40 per cent chance of a rate cut in March. Factors such as the downturn in the crude oil price and the uncertain outlook for the Chinese economy are like to influence the central bank’s monetary policy deliberations. The cash rate has remained on hold since May.

CORPORATES
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, CITIBANK PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD

ASX loses $50b in new year rout

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Original article by Mark Mulligan
The Australian Financial Review – Page: 1 & 6 : 7-Jan-16

A move by the People’s Bank of China to devalue the renminbi by 0.22 per cent weighed on the Australian sharemarket on 6 January 2016. The benchmark S&P/ASX 200 Index fell by around 1.2 per cent. It has now shed 3.3 per cent in the year to date, reducing the local sharemarket’s capitalisation by $A50bn. Global investor sentiment in 2016 has also been hit by factors such as concerns about the economic outlook for China, weak commodity prices and North Korea’s detonation of a hydrogen bomb.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, PEOPLE’S BANK OF CHINA, PEAK ASSET MANAGEMENT PTY LTD, SHANGHAI COMPOSITE INDEX, HSBC BANK PLC, SOCIETE GENERALE, UNITED STATES. FEDERAL RESERVE BOARD, BLOOMBERG LP

Australia forecast to follow Fed on rates

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Original article by Mark Mulligan
The Australian Financial Review – Page: 26 : 22-Dec-15

The Australian dollar has strengthened in the wake of the US Federal Reserve’s decision to increase interest rates. There is growing speculation that the Reserve Bank will begin tightening monetary policy in 2016, with BT Investment Management forecasting that the cash rate will rise from two per cent to 2.5 per cent. Michael Blythe of the Commonwealth Bank expects monetary policy to remain unchanged, while the ANZ Bank has forecast that the cash rate will be cut to 1.5 per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MARKET ECONOMICS PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD

Easy money era coming to an end

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 10 : 18-Dec-15

The Australian sharemarket rose on 17 December 2015, in response to the US Federal Reserve’s decision to increase interest rates from historic lows. However, the Australian dollar lost ground in local trading, while the US dollar gained 0.95 per cent. Meanwhile, the Federal Reserve has given indications that there could potentially be four interest rate increases in 2016, although Mark Bayley of AquAsia has questioned whether there will be scope for such aggressive monetary policy tightening. Many analysts believe that two rate rises are more likely.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, AQUASIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, SCHRODER INVESTMENT MANAGEMENT AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WELLS FARGO BANK

US stocks rise on Fed rate hike

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Original article by Chelsey Dulaney
The Australian – Page: Online : 17-Dec-15

The US Federal Reserve has increased the federal funds rate by 25 basis points at its monetary policy meeting in mid-December 2015. It is the first rise in US short-term interest rates since December 2008. Investors will now be seeking guidance from Federal Reserve chair Janet Yellen on the likely timing of further rate increases. The move to tighten monetary policy has bolstered Wall Street, while the gold price and the US dollar have also risen.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, NASDAQ COMPOSITE INDEX, O’NEILL SECURITIES, NEW YORK STOCK EXCHANGE, EURO STOXX 50 INDEX

RBA’s Stevens sees hope in jobs growth

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 16-Dec-15

The Reserve Bank of Australia reduced its economic growth forecast in November 2015, but governor Glenn Stevens does not believe another downgrade is needed in the near-term. Stevens has also given indications that further interest rate cuts may not be necessary in the current monetary policy cycle, noting that the unemployment rate is well below the central bank’s expectations earlier in 2015. He adds that the downturn in commodity prices may put further downward pressure on the Australian dollar.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BUREAU OF STATISTICS, UNITED STATES. FEDERAL RESERVE BOARD

Surprise job boom rules out rate cut

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 11-Dec-15

Official data from the Australian Bureau of Statistics shows that the economy added 71,400 jobs in November 2015, while a total of 301,700 jobs have been created since the start of the year. The national unemployment rate has fallen to 5.8 per cent, while the unemployment rate in New South Wales has fallen to 5.2 per cent. Some 127,000 jobs have been created nationwide in the last two months, which may prompt the Reserve Bank to leave the cash rate on hold in February 2016.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF EMPLOYMENT, COMMONWEALTH SECURITIES LIMITED, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, JP MORGAN AUSTRALIA LIMITED