BANKS AND BANKING

Economists adjust bets on another rate cut

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Original article by Mark Mulligan
The Australian Financial Review – Page: 31 : 9-Jul-15

The interest rate swap market has priced in an 88 per cent chance that the Reserve Bank of Australia will reduce the cash rate by 25 basis points by the end of 2015. The market now also regards a rate cut in April 2016 as a certainty. Andrew Ticehurst of Nomura Australia expects an interest rate cut in November, while Paul Dales of Capital Economics also anticipates further monetary policy easing.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, CAPITAL ECONOMICS LIMITED

RBA likely to hold as no vote drives down Aussie

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 7-Jul-15

The shadow board of the Reserve Bank of Australia estimates that there is a 57 per cent chance that the central bank will leave the cash rate unchanged on 7 July 2015. Shadow board chairman Timo Henckel says the economic outlook for China is a bigger issue for Australia than the debt crisis in Greece. The Australian dollar’s fall below $US0.76 in the wake of Greece’s referendum will be welcomed by the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN NATIONAL UNIVERSITY, UNIVERSITY OF MELBOURNE, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

RBA tool blunted: ANZ

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 21 : 22-Jun-15

The Reserve Bank of Australia’s policy of reducing interest rates was intended to encourage consumers to spend. However, ANZ Bank economists have concluded that people nearing retirement are in fact saving rather than spending. They also note that older Australians are also saving more as a result of uncertainty concerning superannuation policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

RBA must cut again to weaken $A as Fed takes dovish view

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Original article by Vesna Poljak
The Australian Financial Review – Page: 24 : 19-Jun-15

Many Australian economists now expect the US Federal Reserve to delay a rate cut until December 2015, in the wake of its June monetary policy meeting. The central bank gave indications that any rate rises over the next several years will be at a slower pace than previously expected. This in turn has heightened expectations that the Reserve Bank will further reduce interest rates, in order to put downward pressure on the Australian dollar.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD

RBA reveals why boards won’t invest

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Original article by Jacob Greber, Jemima Whyte, Jenny Wiggins, Anne Hyland, Yolanda Redrup, Perry Williams, Agnes King
The Australian Financial Review – Page: 1 & 8 : 19-Jun-15

Research by the Reserve Bank of Australia has examined factors that deter companies from making capital investments. Some 90 per cent of companies said they would only commit to new investment if the hurdle rate is at least 10 per cent. However, the central bank notes that some companies are applying outdated hurdle rates that do not reflect current interest rates. Computershare tries to maintain its return on capital at a certain level, according to CFO Mark Davis, but is open to revising it when this is deemed to be necessary.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMPUTERSHARE LIMITED – ASX CPU, TECHNOLOGY ONE LIMITED – ASX TNE, ARISTOCRAT LEISURE LIMITED – ASX ALL, AURIZON HOLDINGS LIMITED – ASX AZJ, WESFARMERS LIMITED – ASX WES, BORAL LIMITED – ASX BLD, WOODSIDE PETROLEUM LIMITED – ASX WPL, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD

‘Crazy’ house prices won’t halt rate cut

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Original article by Jacob Greber, Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 11-Jun-15

There has been a 39 per cent increase in residential property prices in Sydney over the last three years. HSBC’s Paul Bloxham estimates that the cost of buying a house in Sydney has risen to around 5.5 times annual income over the last 10 years. In contrast, the cost of home ownership across Australia has remained steady at about 4.1 times income. Reserve Bank governor Glenn Stevens has not ruled out further interest rates, despite the fact that doing so could put further upward pressure on house prices, particularly in Sydney.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, HOUSING INDUSTRY ASSOCIATION LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY

Grim GDP figures may mean further rate cuts

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Original article by Vesna Poljak
The Australian Financial Review – Page: 18 : 2-Jun-15

The general expectation of economists is that Australia recorded GDP growth of about 0.6 per cent in the March 2015 quarter. However, Citigroup has forecast real GDP growth of just 0.5 per cent, while Damien Boey of Credit Suisse says there is the potential for GDP on a nominal basis to contract in the first two quarters of calendar 2015. Boey says the GDP outlook may prompt the Reserve Bank to further reduce the cash rate in the near-term.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL RESERVE BANK OF ATLANTA

Lowest rate since ’60s

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 10-Apr-15

The Reserve Bank of Australia is widely tipped to reduce the cash rate by 25 basis points to two per cent in May 2015. The cash rate is already at its lowest level in five decades, but economists maintain that further rate cuts can help to stimulate the economy. The Commonwealth Bank’s Michael Workman notes that the low level of confidence is a key issue for the economy, while Shane Oliver of AMP Capital says there is potential for more rate cuts beyond May

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, DELOITTE ACCESS ECONOMICS PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD

Economists stumped by RBA’s moves

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Original article by Vesna Poljak, Patrick Commins
The Australian Financial Review – Page: 3 : 9-Apr-15

None of the economists polled by Bloomberg News have been accurate in their forecasts for the monetary policy decisions of all three Reserve Bank of Australia board meetings so far in 2015. Several economists have, however, successfully predicted the outcome of two interest rate decisions, while five have failed to predict any. Meanwhile, the financial market’s forecasts have been right on one occasion in 2015

CORPORATES
RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, BARCLAYS BANK PLC, BT FINANCIAL GROUP PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, NOMURA AUSTRALIA LIMITED, RBC CAPITAL MARKETS, TD SECURITIES, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DEUTSCHE BANK AG, HSBC AUSTRALIA HOLDINGS PTY LTD, UBS HOLDINGS PTY LTD, BANK OF ENGLAND, LABOUR PARTY (GREAT BRITAIN)

RBA baulks at 2pc cash rate, for now

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 6 : 8-Apr-15

The Australian dollar rallied to $US0.7690 on 7 April 2015, after the Reserve Bank left the cash rate on hold at 2.25 per cent. There was widespread expectation among financial market watchers that the central bank would reduce the cash rate, but they have priced in a 76 per cent chance of a rate cut in May. Vimal Gor of BT Investment Management and Paul Dale of Capital Economics both believe that the Reserve Bank missed a chance to put downward pressure on the dollar

CORPORATES
RESERVE BANK OF AUSTRALIA, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CAPITAL ECONOMICS LIMITED, STANDARD AND POOR’S ASX 200 INDEX, JAMIESONCOOTEBONDS PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION