INTEREST RATES – AUSTRALIA

McKibbin warns of 5pc rates

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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

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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

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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

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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

Economists warn Cup Day rate rise may not be last

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Original article by Cecile Lefort
The Australian Financial Review – Page: 23 : 1-Nov-23

The general consensus of economists polled by the Australian Financial Review is that the Reserve Bank will increase the cash rate by 25 basis points to 4.35 per cent on 7 November. Nine of the 35 economists expect the cash rate to peak at 4.6 per cent, implying that there will be at least one more rate rise beyond November. They include Challenger’s chief economist Jonathan Kearns, who was previously the central bank’s head of domestic markets. However, independent economist Stephen Koukoulas expects the cash rate to remain on hold for a fifth consecutive month in November.

CORPORATES
RESERVE BANK OF AUSTRALIA, CHALLENGER LIMITED – ASX CGF

Reserve will not hesitate to hike

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Original article by Patrick Commins
The Australian – Page: 1 : 25-Oct-23

Reserve Bank of Australia governor Michele Bullock has used her first public speech in the role to emphasise that the central bank will increase the cash rate again if it is deemed necessary in order to curb inflation. Bullock conceded that there is a risk that inflation could return to the RBA’s target range more slowly than is currently forecast. Meanwhile, Treasurer Jim Chalmers says inflation is likely to remain higher and for longer than the government would like; however, he says Australia is in a position of relative strength due to the foundations the government has laid in the last 12 months. CPI data to be released on Wednesday is likely to be a key factor in the RBA’s monetary policy decision on 7 November.

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

Odds of Melbourne Cup Day rate rise shorten

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Original article by Shane Wright, Rachel Clun
The Age – Page: Online : 18-Oct-23

The minutes of the Reserve Bank of Australia’s board meeting for October show that it considered increasing the cash rate. The minutes stated that the RBA board has a low tolerance for a slower return of inflation to the target range than currently expected, and that upcoming economic data will determine whether the current monetary pause is sustained. Inflation and unemployment data to be released next week are likely to be a key factor as to whether the cash rate is increased in November. Meanwhile, Deloitte Access Economics has forecast that economic growth will slow to one per cent by the March 2024 quarter, and that the nation will experience both a per capita recession and a recession in the retail sector.

CORPORATES
RESERVE BANK OF AUSTRALIA, DELOITTE ACCESS ECONOMICS PTY LTD

Nation stuck on grow slow: OECD

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Original article by Tom Dusevic
The Australian – Page: 1 & 4 : 20-Sep-23

The OECD still expects Australia to record GDP growth of 1.8 per cent in 2023, in line with its previous forecast. However, GDP growth is expected to be just 1.3 per cent in 2024. The OECD has also forecast that Australia’s headline inflation rate will fall to 3.2 per cent in 2024, down from 5.5 per cent in 2023. However, the Reserve Bank of Australia’s preferred measure of core inflation is forecast to rise to 5.9 per cent in 2023 before falling to 3.3 per cent next year. Meanwhile, the minutes from the RBA’s monthly board meeting shows that board members considered lifting the cash rate to 4.35 per cent in September, due to concerns about inflation

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA

Top economists see end to rate hikes, predict house price recovery

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Original article by Millie Muroi
The Age – Page: Online : 13-Sep-23

The Commonwealth Bank of Australia’s chief economist Stephen Halmarick says a falling inflation rate means that official interest rates have now most likely peaked. He expects consumer spending to begin to decline by the end of 2023, prompting the Reserve Bank to start easing monetary policy in 2024. Halmarick also forecasts that house prices will rise by seven per cent in 2023 and a further five per cent in 2024, citing factors such as rising migration levels and housing supply constraints. Besa Deda from Westpac also suggests that interest rates may have peaked, and she expects the cash rate to begin falling in the second half of 2024.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

RBA to keep rates on hold as inflation stalls

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Original article by Patrick Commins
The Australian – Page: 2 : 6-Sep-23

Philip Lowe has used his final statement as Reserve Bank of Australia governor to contend that the series of interest rate rises since May 2022 are working to establish a "more sustainable balance between supply and demand in the economy". He adds that the decision on Tuesday to pause official rates at 4.1 per cent for a third successive month will give the RBA board more time to assess the economic outlook and the impact of the interest rate rises to date. Lowe emphasised that bringing inflation under control is still the board’s priority. JP Morgan expects the RBA to increase the cash rate one more time, in November. Michele Bullock will formally succeed Lowe on 18 September.

CORPORATES
RESERVE BANK OF AUSTRALIA,JP MORGAN AUSTRALIA LIMITED