INTEREST RATES – AUSTRALIA

$A likely to dip into the 50c range, says Macro Currency

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 24 : 13-Nov-15

Mark Farrington of Macro Currency Group says the Australian dollar remains overvalued, despite its fall in recent months. He estimates that the currency needs to fall by another 10 per cent to the $US0.50 range as the economy rebalances. Meanwhile, Farrington expects the Reserve Bank to reduce the cash rate another two times in the current monetary policy easing cycle, adding that the first cut could be in the June 2016 quarter.

CORPORATES
MACRO CURRENCY GROUP, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Dollar jumps as RBA wrong-foots punters with cash rate

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Original article by Mark Mulligan
The Australian Financial Review – Page: 32 : 4-Nov-15

The Australian dollar was fetching $US0.7199 late in trading on 3 November 2015. The currency reached an intra-day high of $US0.7209 after the Reserve Bank left the cash rate on hold. Central bank governor Glenn Stevens indicated that there may be potential for further rate cuts given the low inflation rate. Felicity Emmett of the ANZ Bank expects the cash rate to be left on hold again in December before being reduced in February.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, JAMIESONCOOTEBONDS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Nailing cup victor easier than RBA pick

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Original article by Jacob Greber, James Thomson
The Australian Financial Review – Page: 7 : 3-Nov-15

It is difficult to guess whether the Reserve Bank of Australia will decide to cut the official interest rate when the board of the central bank meets on 3 November 2015. Economists from Australia’s four big banks believe that the cash rate will remain unchanged at two per cent. Some analysts expect a cut, stressing the fact that headline inflation was only at 1.5 per cent in the September quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, HSBC AUSTRALIA HOLDINGS PTY LTD

Westpac’s Evans says no rate cut in sight

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Original article by Mark Mulligan
The Australian Financial Review – Page: 27 : 30-Oct-15

HSBC’s Paul Bloxham expects a reduction in Australia’s cash rate in either November or December 2015, in the wake of lower-than-expected inflation data in the September quarter. Westpac’s chief economist Bill Evans in turn still believes that the cash rate will remain unchanged in November, noting that the Reserve Bank has ignored one-off falls in the inflation rate in the past. Andrew Ticehurst of Nomura expects the cash rate to remain on hold until February.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED

Aussie dives as third-quarter inflation figure surprises

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Original article by Mark Mulligan
The Australian Financial Review – Page: 34 : 29-Oct-15

The Australian dollar was buying $US0.7119 late in trading on 28 October 2015, after starting the session above $US0.72. The currency fell sharply in response to official data showing that the headline and core inflation rates were lower than forecast in the September quarter, which may strengthen the case for further monetary policy easing. Paul Dales of Capital Economics says an interest rate cut is possible in November.

CORPORATES
CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Bank ‘power’ to protect $30b profits

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Original article by Shaun Drummond, Patrick Commins, Clancy Yeates, Joyce Moullakis
The Australian Financial Review – Page: 1 & 8 : 26-Oct-15

Some fund managers believe that Australian bank customers rather than shareholders are likely to bear the brunt of complying with new capital requirements. Australian Prudential Regulation Authority chairman Wayne Byres recently suggested that shareholders should expect a slightly lower return as a result of the new requirements. However, all four major banks have now lifted their variable mortgage loan interest rates. Meanwhile, the major banks are poised to post a combined profit in excess of $A30bn for 2014-15.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AURORA FUNDS MANAGEMENT LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BELL POTTER SECURITIES LIMITED, WATERMARK FUNDS MANAGEMENT PTY LTD, CITIGROUP PTY LTD, CONTANGO ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, CLYDESDALE BANK PLC, MACQUARIE GROUP LIMITED – ASX MQG, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

CBA hike undercuts Westpac

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Original article by Jonathan Shapiro, Phillip Coorey, Clancy Yeates
The Australian Financial Review – Page: 1 & 9 : 23-Oct-15

The Commonwealth Bank will increase its standard variable mortgage interest rates for owner-occupiers and property investors by 15 basis points, to 5.60 per cent and 5.87 per cent respectively. The move has been criticised by federal Treasurer Scott Morrison and Opposition Leader Bill Shorten, and follows Westpac’s recent decision to lift its home loan rates by 20 basis points. The interest rate rises are in response to new capital requirements for the banking sector.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSSIE HOME LOANS LIMITED, RESERVE BANK OF AUSTRALIA

Bank customers tipped to fix their mortgages

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 21-Oct-15

The fall in the two-year swap rate to just 1.9 per cent has prompted some smaller financial institutions to reduce their fixed mortgage interest rates in recent weeks. ME Bank’s John Caelli says the downturn in the swap rate may be due to renewed speculation about the timing of monetary policy changes in Australia and the US. Jessica Darnbrough of Mortgage Choice says more home loan borrowers may opt for a fixed interest rate in the wake of Westpac’s move to lift its variable rates.

CORPORATES
ME BANK, MORTGAGE CHOICE LIMITED – ASX MOC, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF WESTERN AUSTRALIA LIMITED, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, HERITAGE BANK LIMITED – ASX HBS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Westpac shares climb after capital raising, rate increase

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Original article by Clancy Yeates
The Australian Financial Review – Page: 1 & 10 : 20-Oct-15

Shares in Westpac closed three per cent higher at $A31.34 on 19 October 2015, after being in a trading halt for almost a week. Clime Investment Management’s John Abernethy suggests that short selling in the wake of a $A3.5bn capital raising may have been the main driver of Westpac’s share price rise, rather than its move to lift mortgage interest rates by 0.2 per cent. Morningstar’s David Ellis says rival banks are likely to increase their own home loan rates.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CLIME INVESTMENT MANAGEMENT LIMITED – ASX CIW, MORNINGSTAR PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, ALPHINITY INVESTMENT MANAGEMENT PTY LTD

Diversify call to super funds

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 19-Oct-15

Australian superannuation funds are forecast to have some $US2.5trn ($A3.4trn) worth of assets under management by 2020, compared with $A2bn at the end of March 2015. Itay Tuchman of Citigroup says the strong growth in assets under management in coming years will require super funds to further expand the range of international asset classes in which they invest. Meanwhile, Tuchman says Westpac’s move to increase its mortgage interest rates will strengthen the case for a further reduction in the cash rate.

CORPORATES
CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIANSUPER PTY LTD, IFM INVESTORS PTY LTD, INDIANA TOLL ROAD CONCESSION COMPANY, CANADA PENSION PLAN INVESTMENT BOARD