INTEREST RATES – AUSTRALIA

Wages data crucial factor for RBA interest rates decision

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Original article by John Kehoe, Vesna Poljak
The Australian Financial Review – Page: 8 : 14-Nov-18

The general consensus of economists is for annual wage price index growth of 2.3 per cent when official data for the September quarter is released on 14 November. Paul Bloxham of HSBC says the Reserve Bank could potentially increase the cash rate sooner than expected if WPI growth is stronger than expected. HSBC forecasts that the cash rate will be increased in mid-2019, although financial markets generally do not expect a rate rise until at least November.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. FAIR WORK COMMISSION

RBA says it’s all systems go for booming economy

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Original article by David Uren
The Australian – Page: 1 & 2 : 7-Nov-18

The Reserve Bank of Australia is upbeat about the outlook for the domestic economy, forecasting growth of 3.5 per cent in 2018 and 2019. The central bank also expects the unemployment rate to fall to 4.75 per cent over the next two years, while inflation is forecast to rise above its target range in 2019 to an average of 2.25 per cent. Meanwhile, RBA governor Philip Lowe says growth in wages will be gradual. The RBA has again left interest rates on hold, and financial markets do not anticipate any change in monetary policy until 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Reserve Bank board weigh up trifecta of risks for pre-Cup announcement

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Original article by Jessica Irvine
The Sydney Morning Herald – Page: 9 : 6-Nov-18

The Reserve Bank of Australia is widely expected to leave official interest rates on hold at 1.5 per cent on 6 November. The central bank’s board will consider factors such as subdued wages growth, falling house prices and the high level of household debt in its monetary policy deliberations. The RBA has left the cash rate unchanged on Melbourne Cup Day every year since 2011, and the general consensus of economists is that rates will remain on hold in 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, MERRILL LYNCH (AUSTRALIA) PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE TREASURY

Stubbornly low inflation confounds RBA

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Original article by Michael Roddan
The Australian – Page: 2 : 1-Nov-18

Official data shows that Australia’s headline inflation rate fell to 1.9 per cent in the year to September, compared with 2.1 per cent in the year to June. The underlying inflation rate has fallen to 1.7 per cent. The CPI figures show that an increase in the cost of utilities, tobacco and petrol in the September quarter was offset by a 12 per cent decline in childcare costs following changes to federal subsidies. Despite the fact that inflation is now below the Reserve Bank’s target range of 2-3 per cent, most economists do not expect an increase in official interest rates until at least the end of 2019.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD

Jobless rate at lowest in seven years

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Original article by Michael Roddan, Geoff Chambers
The Australian – Page: 1 & 2 : 19-Oct-18

Australia’s headline unemployment rate fell from 5.3 per cent to five per cent in September, while the trend rate was steady at 5.2 per cent. The Reserve Bank had forecast that the jobless rate would fall to five per cent by the end of 2020, and the latest figures have prompted speculation that it may begin tightening monetary policy sooner than expected. However, Craig James of the Commonwealth Bank does not expect it to take action while the official underemployment rate is 8.3 per cent. Meanwhile, Paul Dales of Capital Economics says a significant increase in wages may be dependent on the jobless rate falling to around four per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, NOMURA AUSTRALIA LIMITED

Stoked US pushes rates up, $A down

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Original article by John Kehoe, Jacob Greber, Mark Ludlow
The Australian Financial Review – Page: 1 & 10 : 5-Oct-18

The Australian dollar fell to a 2.5 year low of $US0.7078 on 4 October, with analysts tipping it could soon fall to below $US0.70 on the back of rising US interest rates. A combination of higher oil prices and a falling Australian dollar could push petrol prices up above $2 per litre, although a weaker dollar could help to make Australian exports more competitive and lead to reduced demand for more expensive imports. Fitch Solutions Macro Research suggested a rise in oil prices could trigger inflation, which could force the Reserve Bank to lift interest rates sooner than expected.

CORPORATES
FITCH AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, GRANT SAMUEL AND ASSOCIATES PTY LTD, OUTLOOK ECONOMICS, HSBC AUSTRALIA HOLDINGS PTY LTD

RBA keeps cash rate at 1.5pc, but sees clouds on horizon

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Original article by Sarah Turner
The Australian Financial Review – Page: 9 : 3-Oct-18

The latest quarterly survey of economists shows that the general consensus is that a rise in the cash rate is unlikely before late 2019. The Reserve Bank of Australia left official interest rates unchanged on 2 October, and governor Philip Lowe has reiterated that progress in reducing the unemployment rate and lifting inflation to the RBA’s target range of 2-3 per cent is likely to be gradual. Gareth Aird of the Commonwealth Bank expects the outlook for the housing market to influence the timing of any change in monetary policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Rates gulf with US is at its widest yet

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Original article by Patrick Commins
The Australian Financial Review – Page: 30 : 28-Sep-18

The divergence between official interest rates in Australian and the US has widened to its highest level since the Reserve Bank adopted inflation targeting in the 1990s. The Federal Reserve’s 25 basis point increase in the cash rate is its eighth rate rise in less than three years, while the Reserve Bank has left rates on hold since August 2016. Bloomberg expects another two US rate rises in the next year, while Australian rates could well remain on hold. Economists say a further widening of the interest rate differential could put downward pressure on the Australian dollar.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, WESTPAC BANKING CORPORATION – ASX WBC, CAPITAL ECONOMICS LIMITED

Westpac slashes new borrower rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 21 : 20-Sep-18

Westpac will increase its standard variable mortgage interest rates for existing customers by 14 basis points on 20 September, with several of its major rivals to lift their rates in coming weeks. However, Westpac will also target new home loan customers, offering rate cuts of up to 110 basis points for the first five years. Customers will then be offered a discount of 80 basis points for the life of their loan. National Australia Bank has yet to announce any changes to its interest rates for existing customers.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Cost of home loan less than 2017: RBA

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Original article by James Glynn
The Australian – Page: 22 : 19-Sep-18

A number of Australian lender have increased their mortgage interest rates since the Reserve Bank’s last board meeting on 4 September. However, the minutes of the meeting note that the cost of financing a home loan remains lower than at the same time in 2017. The Reserve Bank also observed that bank funding costs are still low by historical standards. In addition, the Reserve Bank gave indications that the next movement in the cash rate is likely to be upward, although this is not expected in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA