INTEREST RATES – AUSTRALIA

Jobless rate fears halt RBA rate increases

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian – Page: 2 : 20-Dec-23

The minutes of the Reserve Bank of Australia’s board meeting for December show that it considered whether to increase the cash rate for a second successive month. The board noted the possibility that the unemployment rate could rise higher than originally anticipated due to the central bank’s push to rein in the inflation rate. The board reiterated that it will do whatever is necessary to return inflation to its target range within a reasonable timeframe. Gareth Aird from the Commonwealth Bank expects three official interest rate cuts in 2024, beginning in September.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Rates on hold, as RBA chief flags more rises

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian – Page: 4 : 6-Dec-23

Reserve Bank of Australia governor Michele Bullock has reiterated that returning inflation to the target range of 2-3 per cent within a reasonable timeframe is still the RBA board’s priority. She added that the board will do whatever is necessary to achieve that outcome, raising the prospect that there may be further official interest rate increases in 2024. The RBA’s decision to leave the cash rate on hold at 4.35 per cent on Tuesday had been widely expected, after five interest rate increases during the calendar year. Treasurer Jim Chalmers has welcomed the decision, noting that Australians did not need another rate rise before Christmas. He adds that encouraging progress is being made in the fight against inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

RBA poised to deliver pre-Christmas cheer to hard-pressed borrowers

roymorgansocial Leave a comment

Original article by Shane Wright
The Age – Page: Online : 5-Dec-23

Financial markets and economists generally expect the Reserve Bank of Australia to leave the cash rate unchanged at 4.35 per cent on Tuesday. The central bank has increased official interest rates by 1.25 percentage points during calendar 2023, and an end-of-year pause will be welcomed by Australians with home loans. Meanwhile, data from the ANZ Bank and Indeed suggests that the series of rate rises is starting to impact on the labour market, with the number of job advertisements falling by 4.6 per cent in November. Separate data supports the view that inflation is easing; the average price of unleaded petrol recently fell to its lowest level since August.

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

RBA won’t lift rates again, says OECD

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 4 : 30-Nov-23

The latest CPI data has strengthened the case for leaving Australia’s official interest rates on hold in December, with the annual inflation rate falling from 5.6 per cent in September to just 4.9 per cent in October. Meanwhile, the OECD expects the cash rate to remain on hold at 4.35 per cent until the September 2024 quarter, while the Paris-based organisation forecasts that a gradual easing of monetary policy will see it fall to 3.6 per cent by the end of 2025. Meanwhile, the OECD expects cost-of-living pressures to reduce Australia’s GDP growth from 1.9 per cent in 2023 to just 1.4 per cent in 2024. It also anticipates that inflation will fall below three per cent by 2025.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Households coping well, says Bullock

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 1 & 6 : 29-Nov-23

Reserve Bank of Australia governor Michele Bullock addressed an international conference in Hong Kong on Tuesday. She told the audience – which included a number of central bankers – that Australian households and businesses are in a "pretty good position", despite the "political noise" regarding the RBA’s 13 interest rate increases since May 2022. Bullock also conceded that the RBA’s goal of returning inflation to its target range of 2-3 per cent by the end of 2025 is "very uncertain". Her predecessor Philip Lowe told the conference that he is concerned that central banks may not yet have lifted interest rates far enough to rein in inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA

Bullock: Pay growth risks higher interest rates

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 1 & 4 : 22-Nov-23

Reserve Bank of Australia governor Michele Bullock has warned that reducing the inflation rate is the "crucial challenge" facing the domestic economy over the next several years. She also said that rapidly rising labour costs are another challenge for the RBA in restoring inflation to its target range of 2-3 per cent, and stressed that the recent growth in wages will not be sustainable unless productivity improves. Recent data shows that annual wages growth reached a 14-year high of four per cent in the September quarter. Meanwhile, the minutes of the RBA’s board meeting for November show that economic data will determine whether monetary policy is further tightened. Financial markets have priced in a five per cent chance of an interest rate rise in December.

CORPORATES
RESERVE BANK OF AUSTRALIA

McKibbin warns of 5pc rates

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 1 & 4 : 9-Nov-23

Reserve Bank of Australia governor Michele Bullock noted on Tuesday that progress on reducing inflation has been slower than expected, which contributed to the RBA’s decision to increase official interest rates to 4.35 per cent. Treasurer Jim Chalmers says the rate increase was in the interest of the fight against inflation, while shadow finance minister Jane Hume contends that the federal government’s increase in spending since taking office in May 2022 is making the RBA’s job harder. Meanwhile, former RBA board member Warwick McKibbin argues that increases in taxes or reductions in other government spending programs are necessary to reduce demand in the economy; he adds that the RBA may need to increase the cash rate to five per cent in order to rein in the inflation rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA

No housing crash, just a slowdown say economists

roymorgansocial Leave a comment

Original article by Michael Bleby
The Australian Financial Review – Page: 28 : 8-Nov-23

PEXA’s chief economist Julie Toth says the latest increase in the cash rate is likely to result in a pause in house price growth, as was the case at the start of the current monetary policy tightening cycle. However, Toth does not expect house prices to fall, adding that the rate rise is likely to trigger a new wave of mortgage refinancing. Tim Lawless of CoreLogic says the 13th interest rate rise since May 2022 is likely to further dampen consumer sentiment; he notes that consumer confidence has been at "very pessimistic" levels for nearly 18 months and has a close correlation with housing activity.

CORPORATES
PEXA GROUP LIMITED – ASX PXA, CORELOGIC AUSTRALIA PTY LTD

Bullock acts on stubborn price rises

roymorgansocial Leave a comment

Original article by Michael Read
The Australian Financial Review – Page: 1 & 8 : 8-Nov-23

Reserve Bank of Australia governor Michele Bullock says that slower than expected progress in reducing inflation had prompted the board’s decision to increase the cash rate to 4.35 per cent on Tuesday. Bullock also indicated that economic data and the evolving assessment of risks will determine whether further tightening of monetary policy will be required to ensure that inflation returns to the RBA’s target range of 2-3 per cent in a reasonable timeframe. Financial markets have priced in a seven per cent chance of a rate rise in December, and a 36 per cent chance of another increase in February 2024.

CORPORATES
RESERVE BANK OF AUSTRALIA

IMF calls on RBA to raise rates

roymorgansocial Leave a comment

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 4 : 2-Nov-23

The International Monetary Fund now believes that Australia’s inflation rate will not return to the Reserve Bank’s target range of 2-3 per cent until early 2026. The central bank itself expects inflation to return to the upper limit of its target band by late 2025. Abdoul Wane, the IMF’s mission chief to Australia, notes that although the inflation rate is gradually declining, further interest rate increases are needed in order to bring inflation under control more quickly. Wane also contends that the federal and state governments should defer some infrastructure projects in order to alleviate inflationary pressures.

CORPORATES
INTERNATIONAL MONETARY FUND, RESERVE BANK OF AUSTRALIA