INTEREST RATES – AUSTRALIA

Lenders see sanity return to home loans

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Original article by Michael Bennet
The Australian – Page: 15 & 18 : 19-Dec-16

Bendigo & Adelaide Bank CEO Mike Hirst notes that Australia’s four major banks are offering smaller discounts on mortgage interest rates than in the first half of 2016. He adds that the banks would have struggled to achieve a good return on these loans given the size of some discounts. Credit Union Australia CEO Rob Goudswaard expects a rise in mortgage interest rates after a period of intense competition. He also does anticipate a rise in the cash rate in 2017.

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, CREDIT UNION AUSTRALIA LIMITED, BANK OF QUEENSLAND LIMITED – ASX BOQ, LIBERTY FINANCIAL PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, CREDIT SUISSE (AUSTRALIA) LIMITED, DIGITAL FINANCE ANALYTICS, DEUTSCHE BANK AG

US hike won’t deter the RBA from following suit

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Original article by David Rogers
The Australian – Page: 28 : 14-Dec-16

The US Federal Reserve’s monetary policy statement is likely to attract more scrutiny than the outcome of its December 2016 meeting, as it is generally expected to lift the cash rate by 25 basis points. Meanwhile, the fall in National Australia Bank’s latest business conditions survey may strengthen the case for the Reserve Bank of Australia to further reduce official interest rates, particularly in the wake of the higher-than-expected decline in GDP growth for the September quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, FEDERAL RESERVE BANK OF ST LOUIS, JP MORGAN AUSTRALIA LIMITED

Alarm as economic growth stalls

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Original article by David Rogers
The Australian – Page: 19 & 32 : 8-Dec-16

The Australian economy expanded by just 1.8 per cent in the year to September 2016. The Federal Government’s upcoming mid-year Budget update is likely to include a downgraded 2016 economic growth forecast, which was tipped to be 3.25 per cent in the Budget in May. However, Paul Bloxham of HSBC notes that GDP has not fallen for two consecutive quarters since 1991. Nevertheless, the national accounts for the September quarter may strengthen the case for further official interest rate cuts.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, LEHMAN BROTHERS INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG, WESTPAC BANKING CORPORATION – ASX WBC

Westpac and NAB lift rates on investors

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Original article by Michael Bennet
The Australian – Page: 1 & 6 : 6-Dec-16

National Australia Bank (NAB) and Westpac have raised their interest rates on loans to property investors. NAB’s new and existing investors will now pay 5.55 per cent on loans with variable rates. A rise of 15 basis points will take effect on 12 December 2016. The rate for owners-occupiers remains unchanged at 5.25 per cent. Westpac has lifted interest-only rates for investors and owner-occupiers by eight basis points.

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

Negative gearing not to blame

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Original article by Philip Baker
The Australian Financial Review – Page: 26 : 1-Dec-16

Negative gearing is unfairly blamed for distorting Australia’s residential property market. However, house prices are rising because of record low interest rates. Cheap credit makes property acquisitions attractive to investors. Falling house prices in Perth suggest that property is not necessarily an attractive asset in all circumstances. BIS Shrapnel expects this trend to continue.

CORPORATES
BIS SHRAPNEL PTY LTD, BETASHARES CAPITAL LIMITED

Negative gearing not to blame

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Original article by Philip Baker
The Australian Financial Review – Page: 26 : 1-Dec-16

Negative gearing is unfairly blamed for distorting Australia’s residential property market. However, house prices are rising because of record low interest rates. Cheap credit makes property acquisitions attractive to investors. Falling house prices in Perth suggest that property is not necessarily an attractive asset in all circumstances. BIS Shrapnel expects this trend to continue.

CORPORATES
BIS SHRAPNEL PTY LTD, BETASHARES CAPITAL LIMITED

OECD urges interest rate hikes in 2017

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 29-Nov-16

The OECD states in its latest global economic outlook that the Reserve Bank of Australia is likely to begin increasing official interest rates in late 2017. It also argues that the prospect of rate rises in the US will allow the RBA to act without any concern about putting upward pressure on the Australian dollar. Meanwhile, the OECD forecasts that Australia’s economic growth will rise toward three per cent in 2018, while it concludes that there is still scope for the Federal Government to increase spending on infrastructure projects.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Iron, coal rebound to lift rates

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Original article by David Rogers, Barry FitzGerald
The Australian – Page: 19 & 22 : 29-Nov-16

Coal and iron ore are currently trading at prices that are significantly above the forecasts made in the Australian Government’s May 2016 Budget. Based on current prices, the nation’s export earnings in 2016 will be about $A80bn higher than in 2015. Tim Toohey of Goldman Sachs says this should be sufficient to avert the risk of Australia’s credit rating being downgraded. Financial markets believe that there is also now a better-than-even chance of an increase in the cash rate by the end of 2017.

CORPORATES
GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN NATIONAL UNIVERSITY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BLOOMBERG LP

Stocks bounce back, buoyed by Trump’s fiscal optimism

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Original article by Vesna Poljak
The Australian Financial Review – Page: 23 & 34 : 11-Nov-16

The Australian sharemarket posted its largest single-day gain in more than five years on 10 November 2016, while Wall Street defied expectations of a big fall after the election of Donald Trump, finishing in the black. The Australian dollar also rallied, while local and US 10-year bond yields rose. Financial markets have scaled back the odds of a reduction in Australia’s cash rate by mid-2017, while there has been a slight easing of expectations of a rate rise in the US in December 2016.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, NIKKEI 225 INDEX, HANG SENG INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, EURO STOXX 50 INDEX, PM CAPITAL LIMITED, RESERVE BANK OF NEW ZEALAND, UNITED STATES. FEDERAL RESERVE BOARD, QIC LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

RBA likely to cut again but not in a hurry

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Original article by Jessica Sier
The Australian Financial Review – Page: 35 : 3-Nov-16

Financial markets now consider that there is an eight per cent chance that the Reserve Bank of Australia will reduce official interest rates in December 2016. However, there is now seen to be a 36 per cent change that rates will be cut by May 2017. Michael Blythe of the Commonwealth Bank anticipates another rate cut during the June quarter, while Paul Dales of Capital Economics says there is potential for the next change in monetary policy to be an increase in the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED