INTEREST RATES – AUSTRALIA

RBA likely to hold as no vote drives down Aussie

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 7-Jul-15

The shadow board of the Reserve Bank of Australia estimates that there is a 57 per cent chance that the central bank will leave the cash rate unchanged on 7 July 2015. Shadow board chairman Timo Henckel says the economic outlook for China is a bigger issue for Australia than the debt crisis in Greece. The Australian dollar’s fall below $US0.76 in the wake of Greece’s referendum will be welcomed by the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN NATIONAL UNIVERSITY, UNIVERSITY OF MELBOURNE, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

All eyes on Greece as markets await result

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Original article by Rose Powell
The Australian Financial Review – Page: 22 : 6-Jul-15

Australia’s benchmark S&P/ASX200 Index shed 0.14 per cent in the week ended 3 July 2015. The debt crisis in Greece and the country’s referendum referendum are likely to be the key issue for investors when trading resumes on 6 July. Meanwhile, Stephen Walters of JP Morgan expects the Reserve Bank to leave the cash rate unchanged on 7 July, while Rob Rennie of Westpac forecasts that the Australian dollar will fall below $US0.75 in the near-term.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

Credit card rates up despite cash rate drop

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Original article by Clancy Yeates
The Australian Financial Review – Page: 16 : 24-Jun-15

Data from the Reserve Bank of Australia shows that the average credit card interest rate has risen to 19.75 per cent since the currency monetary policy easing cycle began in 2011. The cash rate has fallen to just two per cent over the same period. MWE Consulting’s Mike Ebstein attributes this to the fact that the proportion of credit card debt that is accruing interest has fallen from 73.7 per cent to just 65.6 per cent, with more consumers opting to pay their entire credit card debt each month.

CORPORATES
RESERVE BANK OF AUSTRALIA, MWE CONSULTING PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, CONSUMER ACTION LAW CENTRE

RBA tool blunted: ANZ

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 21 : 22-Jun-15

The Reserve Bank of Australia’s policy of reducing interest rates was intended to encourage consumers to spend. However, ANZ Bank economists have concluded that people nearing retirement are in fact saving rather than spending. They also note that older Australians are also saving more as a result of uncertainty concerning superannuation policy.

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

RBA must cut again to weaken $A as Fed takes dovish view

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Original article by Vesna Poljak
The Australian Financial Review – Page: 24 : 19-Jun-15

Many Australian economists now expect the US Federal Reserve to delay a rate cut until December 2015, in the wake of its June monetary policy meeting. The central bank gave indications that any rate rises over the next several years will be at a slower pace than previously expected. This in turn has heightened expectations that the Reserve Bank will further reduce interest rates, in order to put downward pressure on the Australian dollar.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD

‘Crazy’ house prices won’t halt rate cut

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Original article by Jacob Greber, Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 11-Jun-15

There has been a 39 per cent increase in residential property prices in Sydney over the last three years. HSBC’s Paul Bloxham estimates that the cost of buying a house in Sydney has risen to around 5.5 times annual income over the last 10 years. In contrast, the cost of home ownership across Australia has remained steady at about 4.1 times income. Reserve Bank governor Glenn Stevens has not ruled out further interest rates, despite the fact that doing so could put further upward pressure on house prices, particularly in Sydney.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, HOUSING INDUSTRY ASSOCIATION LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY

Grim GDP figures may mean further rate cuts

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Original article by Vesna Poljak
The Australian Financial Review – Page: 18 : 2-Jun-15

The general expectation of economists is that Australia recorded GDP growth of about 0.6 per cent in the March 2015 quarter. However, Citigroup has forecast real GDP growth of just 0.5 per cent, while Damien Boey of Credit Suisse says there is the potential for GDP on a nominal basis to contract in the first two quarters of calendar 2015. Boey says the GDP outlook may prompt the Reserve Bank to further reduce the cash rate in the near-term.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL RESERVE BANK OF ATLANTA

Low rates, yields to hit Suncorp, IAG

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Original article by Ruth Liew
The Australian Financial Review – Page: 18 : 26-May-15

The earnings of Australian-listed insurance companies are likely to be affected by low interest rates and bond yields. Investment income accounts for around 40 per cent of QBE Insurance Group’s profits, compared with 25 per cent in the case of Insurance Australia Group (IAG) and Suncorp. IAG CEO Mike Wilkins says most of the company’s insurance book comprises "short tail risk".

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SUNCORP GROUP LIMITED – ASX SUN, CREDIT SUISSE (AUSTRALIA) LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Banks cut deeper into deposit rates

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Original article by Clancy Yeates
The Australian Financial Review – Page: 20 : 20-May-15

Australian banks have reduced the interest rate on some savings accounts by the full 25 basis point reduction in the cash rate in May 2015. However, some banks have reduced their mortgage interest rates by a lower margin. Michelle Hutchison of Finder.com.au notes that the majority of households do not have a mortgage, while most have savings accounts. Some banks have offered a sweetener to savers by increasing the interest rate on term deposits and accounts that offer bonus interest rates.

CORPORATES
FINDER.COM.AU, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MACQUARIE GROUP LIMITED – ASX MQG, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BELL POTTER SECURITIES LIMITED, BANK OF WESTERN AUSTRALIA LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, BANK OF MELBOURNE LIMITED

Lowest rate since ’60s

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 10-Apr-15

The Reserve Bank of Australia is widely tipped to reduce the cash rate by 25 basis points to two per cent in May 2015. The cash rate is already at its lowest level in five decades, but economists maintain that further rate cuts can help to stimulate the economy. The Commonwealth Bank’s Michael Workman notes that the low level of confidence is a key issue for the economy, while Shane Oliver of AMP Capital says there is potential for more rate cuts beyond May

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, DELOITTE ACCESS ECONOMICS PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD