INTEREST RATES – AUSTRALIA

Deflation raises budget rate cut

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

The consumer price index fell by 0.2 per cent in the March 2016 quarter, with year-on-year growth of 1.3 per cent. The latest inflation data has raised the prospect that the Reserve Bank of Australia could cut official interest rates on 3 May, when the Federal Government will also deliver the 2016 Budget. National Australia Bank now expects the cash rate to be reduced in May, while financial markets now regard the chance of a rate rise to be 55 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, JP MORGAN AUSTRALIA LIMITED

Dollar overvaluation won’t provoke rate cut, says NAB

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Original article by Jessica Sier, Mark Mulligan
The Australian Financial Review – Page: 26 : 27-Apr-16

The Australian dollar has risen by more than 12 per cent since mid-January 2016. National Australia Bank’s Rodrigo Catril says the currency may be approaching previous levels at which the Reserve Bank had expressed "discomfort". The central bank responded to these concerns by reducing the cash rate, but NAB does not believe that the dollar’s current level will be sufficiently high for the RBA to cut interest rates in May. The latest inflation and jobs data will also influence the RBA’s monetary policy decision.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, OANDA AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

BoQ lifts mortgage rates as profit jumps 11pc

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 8-Apr-16

The Bank of Queensland has reported an 11 per cent rise in 2015-16 interim profit to $A171 million. CEO Jon Sutton says the bank’s variable interest rates for owner-occupier home loans will be raised by 12 basis points to 5.86 per cent. Mortgage rates on investor loans will rise by 25 basis points to 6.28 per cent. The new rates will take effect in mid-April 2016.

CORPORATES
BANK OF QUEENSLAND LIMITED – ASX BOQ, RESERVE BANK OF AUSTRALIA, MACQUARIE EQUITIES LIMITED, VIRGIN MONEY (AUSTRALIA) PTY LTD

Strong $A may force RBA’s hand

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Original article by David Rogers
The Australian – Page: 19 & 28 : 6-Apr-16

AMP Capital Investors’ Shane Oliver says the Reserve Bank of Australia is unlikely to increase the cash rate for some time. He says the prospect of slowing economic growth could prompt further easing of monetary policy in the near-term. The central bank left official interest rates on hold at two per cent on 5 April 2016, and gave indications that a further rise in the Australian dollar or an increase in unemployment could provide the impetus for a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD

RBA budget day cut ‘close’

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 8 : 4-Apr-16

The consensus of economists polled by Fairfax Media is for the Reserve Bank of Australia to leave official interest rates unchanged on 5 April 2016. However, about 25 per cent of the 12 economists expect the cash rate to be reduced on 3 May, when the Federal Government will also hand down the Budget. Some economists suggest that the recent rise in the value of the Australian dollar will prompt a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, FAIRFAX MEDIA LIMITED – ASX FXJ, NOMURA AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, CAPITAL ECONOMICS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

Spending spree lifts economy to highest speed in two years

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 3-Mar-16

The latest GDP data shows that the Australian economy grew by 0.6 per cent in the December 2015 quarter, and by three per cent year-on-year. The general consensus of economists was for annual growth of just 2.5 per cent. Economic growth was boosted by an increase in government and consumer spending, although the household savings rate fell to a post-global financial crisis low of 7.6 per cent. The stronger-than-expected economic growth rate will reduce the chances of further official interest rate cuts in the near-term.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, UBS HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RIO TINTO LIMITED – ASX RIO, GROUP OF SEVEN (G-7), ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Higher dollar not enough to kill RBA’s chill

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Original article by Vanessa Desloires, Mark Mulligan
The Australian Financial Review – Page: 3 : 29-Feb-16

There is general consensus among economists that the Reserve Bank will leave the cash rate unchanged at two per cent on 1 March 2016. Shane Oliver of AMP Capital is among the economists who expect an interest rate cut at some point in 2016. Meanwhile, the Commonwealth Bank’s Michael Blythe does not expect the central bank to resume "jawboning" the Australian dollar in its monetary policy statement, despite its recent rise to a seven-week high.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NOMURA AUSTRALIA LIMITED, BETASHARES CAPITAL LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Rise in jobless to cut interest rates

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Original article by Adam Creighton
The Australian – Page: 1 & 5 : 19-Feb-16

Official data shows that Australia’s unemployment rate rose from 5.8 per cent to six per cent in January 2016. However, the participation rate was steady at 65.2 per cent. Meanwhile, part-time employees now account for a record 31.2 per cent of the workforce. The jobless rate in New South Wales was 0.3 per cent higher at 5.5 per cent, while unemployment in Victoria increased by 0.3 per cent to 6.3 per cent. Tim Toohey of Goldman Sachs says the jobs data will strengthen the case for further interest rate cuts, and he expects two rate cuts in 2016.

CORPORATES
GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF EMPLOYMENT, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UNITED STATES. FEDERAL RESERVE BOARD

Australia at risk from hard landing in China

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 18-Feb-16

The Chinese economy expanded by just 6.9 per cent in 2015, and Oxford Economics forecasts a gradual slowing of economic growth over the next five years. However, Sian Fenner of Oxford Economics warns that Australia could face a recession in 2016 if the Chinese economy experiences a "hard landing". Fenner adds that in the event of a recession the Reserve Bank could reduce the cash rate to just 0.25 per cent, which would limit the extent of the economic downturn.

CORPORATES
OXFORD ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, AVIVA PLC, PEOPLE’S BANK OF CHINA, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

Inflation uptick takes interest rate cut off the table

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 2 : 28-Jan-16

Data from the Australian Bureau of Statistics show that consumer inflation rose by a higher-than-expected 0.4 per cent in the December 2015 quarter. The annual inflation rate was also above expectations at 1.7 per cent. Financial markets have responded to the inflation data by downgrading the chances of a rise in the cash rate in February to just four per cent. Morgan Stanley’s Daniel Blake says a mid-year rate cut remains on the cards given the CPI data.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DEUTSCHE BANK AG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BANK OF JAPAN, STANDARD AND POOR’S ASX 200 INDEX