INTEREST RATES – AUSTRALIA

Lower rates help stocks but won’t spur growth

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Original article by David Rogers
The Australian – Page: 31 : 4-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, but it has shed 2.2 per cent since the Reserve Bank reduced the cash rate to a record low on 2 August. However, equities are likely to benefit from a likely trend for self-managed superannuation funds to reduce their exposure to cash as returns from such investments fall. The outlook for interest rates in Australia and abroad is also likely to ensure that price-earnings ratios remain elevated for some time.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, CREDIT SUISSE (AUSTRALIA) LIMITED

RBA cuts, dismissing property bubble risk

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 3-Aug-16

Financial markets believe there is a 52 per cent chance that the Reserve Bank will reduce official interest rates to 1.25 per cent by November 2016, after the cash rate was cut by 25 basis points to 1.5 per cent on 2 August. The central bank has now reduced the cash rate by 3.25 per cent during the current monetary policy easing cycle, which began in late 2011. The RBA has warned that inflation is likely to remain low for some time, and noted that a housing price bubble now appears to be unlikely.

CORPORATES
RESERVE BANK OF AUSTRALIA

Rates cut on cards as economy loses gloss

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Original article by David Uren
The Australian – Page: 2 : 2-Aug-16

The Reserve Bank of Australia is widely tipped to reduce official interest rates to a new low of 1.5 per cent on 2 August 2016. The central bank’s monetary policy easing cycle began in November 2011, and it has since reduced the cash rate 11 times. Factors such as Australia’s low inflation rate and the uncertain outlook for the US and Chinese economies may prompt another cut. However, Tim Lawless of CoreLogic says the RBA will be mindful that a rate cut could put more upward pressure on house prices.

CORPORATES
RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, REUTERS HOLDINGS PLC

Post-Brexit rally tipped to continue

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Original article by David Rogers
The Australian Financial Review – Page: 32 : 2-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, and it has risen by 11 per cent since falling sharply after the UK voted to leave the European Union. The benchmark index is likely to continue to perform well in August, regardless of whether the Reserve Bank decides to reduce the cash rate. The bourse is benefiting from expectations that interest rates in Australia and overseas will remain low for some time. The latest GDP data in the US has dampened expectations that the Federal Reserve will ease monetary policy in 2016.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Inflation no cause for ‘market hysteria’

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 28-Jul-16

Australia’s latest inflation data shows that consumer prices rose by just 0.4 per cent in the June 2016 quarter, while the annual inflation rate of one per cent is the lowest since 1999. The annual core inflation rate was 1.5 per cent, which is well below the Reserve Bank’s target range of 2-3 per cent. Financial markets now estimate that there is a 52 per cent chance that the central bank will reduce official interest rates in August. However, former board member Warwick McKibbin has cautioned against a hasty response to the inflation data.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, JAPAN. OFFICE OF THE PRIME MINISTER, UNITED STATES. FEDERAL RESERVE BOARD

Investors focus on inflation, central banks

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Original article by Jessica Sier
The Australian Financial Review – Page: 20 : 25-Jul-16

Futures traders expect the Australian sharemarket to gain about four points when trading resumes on 25 July 2016. The local bourse is likely to benefit from a positive lead from Wall Street, having lost ground in the previous trading session. Investors will be awaiting the upcoming release of inflation data for the June quarter, which could provide guidance on the Reserve Bank’s next move on the interest rate front. The US Federal Open Market Committee’s monetary policy statement will also be closely scrutinised by investors.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED, BANK OF JAPAN

RBA keeps open door for August interest rate cut

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 20-Jul-16

The minutes of the Reserve Bank of Australia’s monthly board meeting show that inflation data for the June 2016 quarter will be a key factor in its monetary policy decision in August. The central bank’s board expects the inflation rate to remain below its target range of 2-3 per cent in the near-term. Meanwhile, board members anticipate that the UK’s exit from the European Union will have a "modest adverse effect" on global economic growth, but they noted that it is too soon to assess the extent of the impact.

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

Jobless rate edges up and fewer hours worked

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Original article by Jacob Greber
The Australian Financial Review – Page: 6 : 15-Jul-16

Data from the Australian Bureau of Statistics shows that the nation’s unemployment rate rose from 5.7 per cent to 5.8 per cent in June 2016. Some 38,400 full-time jobs were created during the month, although this was offset by the loss of part-time positions, resulting in a net gain of almost 8,000 jobs. ANZ Bank economist Felicity Emmett says the low jobs growth and low inflation will most likely prompt the Reserve Bank to reduce the cash rate in August.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

Election logjam won’t force RBA rate cut

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Original article by Mark Mulligan
The Australian Financial Review – Page: 27 : 5-Jul-16

Paul Dales of Capital Economics expects the Reserve Bank of Australia to leave the cash rate unchanged on 5 July 2016. The general consensus of economists, including Dales, is that the central bank will reduce official interest rates to 1.5 per cent in August, due to weak underlying inflation. The inflation data for the June 2016 quarter is likely to be a bigger influence on monetary policy than the political uncertainty in the wake of the federal election.

CORPORATES
CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FITCH RATINGS LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED

Election shock means tougher job for RBA

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Original article by Vesna Poljak
The Australian Financial Review – Page: 28 : 4-Jul-16

The Australian sharemarket is expected to lose ground when trading resumes on 4 July 2016. Uncertainly regarding the outcome of the federal election is likely to weigh on investor sentiment, while the Australian dollar is tipped to fall after peaking at $US0.7503 in local trading on 1 July. Stephen Walters of the Australian Institute of Company Directors says Australia’s "AAA" credit rating may be reviewed as a result of the election. Meanwhile, economists say the Reserve Bank is now unlikely to reduce the cash rate in July.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, RESERVE BANK OF AUSTRALIA, FIIG SECURITIES LIMITED, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET