INTEREST RATES – UNITED STATES

Stoked US pushes rates up, $A down

roymorgansocial Leave a comment

Original article by John Kehoe, Jacob Greber, Mark Ludlow
The Australian Financial Review – Page: 1 & 10 : 5-Oct-18

The Australian dollar fell to a 2.5 year low of $US0.7078 on 4 October, with analysts tipping it could soon fall to below $US0.70 on the back of rising US interest rates. A combination of higher oil prices and a falling Australian dollar could push petrol prices up above $2 per litre, although a weaker dollar could help to make Australian exports more competitive and lead to reduced demand for more expensive imports. Fitch Solutions Macro Research suggested a rise in oil prices could trigger inflation, which could force the Reserve Bank to lift interest rates sooner than expected.

CORPORATES
FITCH AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, GRANT SAMUEL AND ASSOCIATES PTY LTD, OUTLOOK ECONOMICS, HSBC AUSTRALIA HOLDINGS PTY LTD

Rates gulf with US is at its widest yet

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian Financial Review – Page: 30 : 28-Sep-18

The divergence between official interest rates in Australian and the US has widened to its highest level since the Reserve Bank adopted inflation targeting in the 1990s. The Federal Reserve’s 25 basis point increase in the cash rate is its eighth rate rise in less than three years, while the Reserve Bank has left rates on hold since August 2016. Bloomberg expects another two US rate rises in the next year, while Australian rates could well remain on hold. Economists say a further widening of the interest rate differential could put downward pressure on the Australian dollar.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, WESTPAC BANKING CORPORATION – ASX WBC, CAPITAL ECONOMICS LIMITED

Federal Reserve hikes rates for third time this year

roymorgansocial Leave a comment

Original article by Donna Borak
CNNMoney – Page: Online : 27-Sep-18

The Federal Reserve has increased the federal funds rate by 25 basis points to a range of 2% to 2.25% in a move than had been widely expected. It is the third interest rate rise in 2018, and a majority of Federal Reserve policymakers now favour a fourth increase in December. Central bank policymakers also anticipate three rate rises in 2019, while the Federal Reserve has upgraded its forecast for US economic growth in 2018 from 2.8% to 3.1%. However, growth is expected to slow to 2.5% in 2019.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE

Fed chief Powell stays put with policy for now

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 27 : 19-Jul-18

US Federal Reserve chairman Jerome Powell has signalled that the central bank will retain its stated policy of increasing interest rates gradually, at least for now. The potential for a full-blown trade war with China appears to be the main reason for Powell’s caveat of "for now". Meanwhile, UBS forecasts that the Reserve Bank of Australia would most likely delay tightening monetary policy until beyond 2020 in the event of a full trade war.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S 500 INDEX

Susceptible $A tipped to fall to US70c

roymorgansocial Leave a comment

Original article by Sarah Turner
The Australian Financial Review – Page: 27 : 10-Jul-18

Some economists are bearish about the outlook for the Australian dollar, which has traded at close to a 12-month low since mid-June. Stephen Roberts of Laminar Capital expects the currency to be trading at $US0.70 at the end of 2018, citing the prospect of a growing gap between official interest rates in Australia and the US. Elliot Clarke of Westpac in turn expects the Australian dollar to test the $US0.70 level in the second half of 2019.

CORPORATES
LAMINAR CAPITAL, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA

Fed hikes put squeeze on banks

roymorgansocial Leave a comment

Original article by Karen Maley
The Australian Financial Review – Page: 1 & 28 : 15-Jun-18

The US Federal Reserve has signalled that two more interest rate increases are likely in 2018, following its second rate rise for the year. The new target range for the federal funds rate is between 1.75% and 2%, while the Reserve Bank of Australia has kept its cash rate at 1.5% for almost two years. The divergence in monetary policy has coincided with rising wholesale borrowing costs for Australia’s major banks, as well as a recent spike in the bank bill swap rate. Shane Oliver of AMP says local banks could potentially respond by increasing their mortgage rates on investment and interest-only loans.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCIAL STABILITY BOARD, DEUTSCHE BANK AG, SOCIETE GENERALE SA, BNP PARIBAS SA, GRUPO SANTANDER

Markets take cautious view of historic talks

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 19 & 28 : 13-Jun-18

The summit meeting between US President Donald Trump and North Korean leader Kim Jong-un has had relatively little impact on global financial markets. Royal Bank of Canada’s Sue Trinh says the upcoming release of key economic data in the US and Australia will be a greater focus for financial markets in the near-term, noting that the two leaders differ on just what "complete denuclearisation" on the Korean peninsula will entail. Meanwhile, the US Federal Reserve is tipped to tighten monetary policy at its monthly meeting.

CORPORATES
UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, ROYAL BANK OF CANADA, UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, EUROPEAN CENTRAL BANK, BANK OF JAPAN, KOSPI INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 200 INDEX

Fed holds rates steady, June rise on cards

roymorgansocial Leave a comment

Original article by Nick Timiraos
The Australian – Page: 34 : 4-May-18

Data from CME Group shows that most futures market traders expect the US Federal Reserve to increase interest rates in June, after the central bank left the cash rate on hold in May. However, futures traders rate the chances of monetary policy being tightened two more times beyond June at almost 50 per cent. The Federal Reserve has signalled that it will increase the cash rate gradually, despite recent data showing that inflation has reached its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, JP MORGAN CHASE AND COMPANY, DOW JONES INDUSTRIAL AVERAGE INDEX, NOMURA SECURITIES INTERNATIONAL INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Jobs cool RBA’s outlook on rates

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 19 & 30 : 23-Mar-18

The Australian dollar fell in local trading on 22 March in response to data showing that the number of jobs created in February was below expectations at 17,500. Australia’s unemployment rate rose from 5.5 per cent to 5.6 per cent during the month, while the labour participation rate also increased. Economists suggest that the jobs data means the Reserve Bank is unlikely to increase official interest rates in the near-term. Meanwhile, the strength of the US economy has prompted the Federal Reserve to flag three interest rates rises in 2019, in addition to another two in 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CAPITAL ECONOMICS LIMITED

US Fed set to rise further above RBA

roymorgansocial Leave a comment

Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 32 : 23-Mar-18

The yield on US 10-year bonds has eased to 2.86 per cent in response to the Federal Reserve’s move to increase interest rates to 1.75 per cent. Kapstream Capital’s Steve Goldman expects the central bank to increase US rates to 2.5 per cent, adding that this is more likely to be in 2019 rather than 2018. The US federal funds rate is now higher than Australia’s cash rate for the first time since 2000. The interest rate differential is expected to widen, as the Federal Reserve has flagged further rate rises in 2018 and 2019. Most analysts do not expect the Reserve Bank to do so until at least the March 2019 quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, KAPSTREAM CAPITAL PTY LTD, NOMURA AUSTRALIA LIMITED, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED