INTEREST RATES – AUSTRALIA

RBA getting it wrong on jobs

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Original article by Jack Quail
The Australian – Page: 2 : 10-Dec-24

The Reserve Bank convened for its final board meeting for 2024 on Monday, with ACTU secretary Sally McManus being joined by union members outside its Sydney headquarters as she called on the RBA to cut interest rates. Melbourne University economics professor Jeff Borland, who is considered Australia’s leading labor market expert, contends the Australian jobs market is not as strong as the RBA thinks, and that its true state does not justify the RBA keeping the cash rate at 4.35 per cent; the RBA will announce its interest rate decision on Tuesday.

CORPORATES
RESERVE BANK OF AUSTRALIA, ACTU, UNIVERSITY OF MELBOURNE

Jobs rush likely to postpone rate cut

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Original article by Jack Quail
The Australian – Page: 1 & 5 : 20-Nov-24

The Reserve Bank of Australia has noted in the minutes of its board meeting for November that there are signs that the job market is beginning to tighten. The unemployment rate was steady at 4.1 per cent in October, and RBA governor Michelle Bullock has previously indicated that the strength of the labour market is amongst the reasons why further interest rate increases could be on the agenda. HSBC’s chief economist Paul Bloxham agrees with the RBA’s assessment that the labour market may not weaken further, which is likely to rule out an interest rate cut in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA, HSBC HOLDINGS PLC

Resist your urge to splurge, ALP told

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Original article by Jack Quail
The Australian – Page: 1 & 5 : 6-Nov-24

The Reserve Bank of Australia’s decision to leave the cash rate unchanged at 4.35 per cent on Tuesday had been widely expected. The RBA remains focused primarily on underlying inflation, which governor Michele Bullock says is still too high for the central bank to consider reducing the cash rate. Underlying inflation was 3.5 per cent in the year to September, and Bullock notes that temporary electricity rebates contributed to the headline inflation rate falling to 2.8 per cent. Bullock has also emphasised the need for Treasurer Jim Chalmers to avoid any spending measures that may fuel inflation ahead of the federal election.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Rate call kills hopes for late spring bounce

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Original article by Michael Bleby
The Australian Financial Review – Page: 25 : 6-Nov-24

Kevin Brogan from national valuation firm Herron Todd White says the Reserve Bank’s decision to leave the cash rate unchanged on Tuesday will deter some buyers from entering the housing market. He adds that there is likely to be downward pressure on activity and prices in so-called mortgage-belt housing markets in particular. Property industry experts also suggest that the rates decision will hinder any upturn in the east coast market at the tail-end of the spring selling season.

CORPORATES
HERRON TODD WHITE AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA

Rates on hold will not help home buyers

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Original article by Nila Sweeney
The Australian Financial Review – Page: 26 : 25-Sep-24

Australian home buyers’ borrowing capacity has been cut by around 30 per cent since the Reserve Bank started reducing the cash rate in May 2022. Tim Lawless from CoreLogic says borrowing capacity – and therefore buying activity in the housing market – will not improve until the central bank starts to ease monetary policy. AMP’s chief economist Shane Oliver in turn says demand is unlikely to rise until there are clear signs that the Reserve Bank is about to reduce the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, AMP LIMITED – ASX AMP

Don’t expect rate cut soon: Bullock

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Original article by Michael Read
The Australian Financial Review – Page: 1 & 8 : 25-Sep-24

Reserve Bank of Australia governor Michele Bullock has ruled out an official interest rate cut in the near-term, following the central bank’s decision to leave the cash rate unchanged at 4.35 per cent on Tuesday. Bullock says the RBA remains focused on the underlying inflation rate, rather than the headline rate. Monthly data to be released on Wednesday is expected to show that headline inflation was within the RBA’s target range of 2-3 per cent in August, compared with 3.5 per cent in July. However, Bullock has emphasised that electricity rebates from the federal and state governments contributed to this fall, and headline inflation is likely to rise above the target when the rebates expire next year. Lower petrol prices also put downward pressure on headline inflation in August.

CORPORATES
RESERVE BANK OF AUSTRALIA

Inflation is smashing incomes more than interest rates are

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Original article by John Kehoe, Michael Read
The Australian Financial Review – Page: 3 : 10-Sep-24

Challenger’s chief economist Jonathan Kearns refutes claims by Treasurer Jim Chalmers that the Reserve Bank’s interest rate rises are "smashing the economy". The latest national accounts data shows that total household incomes rose by 6.2 per cent in 2023-24. Kearns contends that interest rates eroded just 1.3 percentage points of the income gains, compared with the 4.4 percentage point impact of inflation. He notes that unlike interest rates, inflation affects all households. Kearns is a former economist at the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, CHALLENGER LIMITED – ASX CGF

Treasurer’s panic and disloyalty

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Original article by Dennis Shanahan, Jack Quail
The Australian – Page: 1 & 4 : 4-Sep-24

Former prime minister John Howard has criticised Treasurer Jim Chalmers for attempting to blame the Reserve Bank of Australia for the nation’s high interest rates. He contends that this has badly backfired, and RBA governor Michele Bullock does not deserve to be attacked in this way. Howard has also defended the performance of Bullock and the RBA’s board, arguing that they have had no alternative to raising the cash rate, due to factors such as the level of inflation and government spending. However, former RBA governor Bernie Fraser says the central bank has lost credibility and needs to reduce the cash rate sooner rather than later.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

‘Too far’: ALP frontbencher’s warning to Reserve Bank

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Original article by Jack Quail
The Australian – Page: 1 & 4 : 3-Sep-24

Treasurer Jim Chalmers says CPI data to be released on Wednesday will underline the impact of interest rate rises on the economy. Chalmers contends that he is "not taking a shot at anyone", although some observers have suggested that he is seeking to blame the Reserve Bank for the slowdown in the economy. Independent economist Saul Eslake says the fact that there has been only a small uptick in the unemployment rate refutes Chalmers’ claim that the Reserve Bank’s interest rate increases are "smashing the economy". Meanwhile, Assistant Immigration Minister Matt Thistlethwaite says the central bank must not go "too far" in seeking to combat inflation.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

RBA sticks to its guns: no rate cut before 2025

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Original article by Joe Kelly
The Australian – Page: 4 : 21-Aug-24

The minutes from the Reserve Bank of Australia’s two-day board meeting in eatly August show that it considered increasing the cash rate to 4.6 per cent. The minutes have also reinforced expectations that the central bank will not reduce the cash rate in 2024, with the board concluding that restoring inflation to the mid-point of its 2-3 per cent target range would be delayed until 2027 if official interest rates were cut to 4.1 per cent in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA