House price falls key caveat for Reserve

Original article by Matthew Cranston, Natasha Gillezeau
The Australian Financial Review – Page: 3 : 20-Feb-19

The minutes of the Reserve Bank’s monthly board meeting show that the central bank believes that the cases for an increase or a reduction in the cash rate are "more evenly balanced" now than they had been over the last year. In contrast, the Reserve Bank had stated in December that a rate rise is more likely. The central bank has also noted that dwelling investment is likely to decline more sharply than previously anticipated, and it has given indications that the outlook for house prices may influence the timing of the next change in monetary policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, JP MORGAN AUSTRALIA LIMITED

Lowe shortens the odds for a Cup Day cut

Original article by David Rogers
The Australian – Page: 27 : 8-Feb-19

A growing number of economists expect the Reserve Bank of Australia to reduce the cash rate by the end of 2019, although the general consensus is that interest rates will remain on hold. Meanwhile, financial market traders have priced in a 56 per cent chance of a rate cut by November, compared with just 34 per cent two days ago. UBS now expects the cash rate to be reduced by 25 basis points in November, with a further rate cut in the first half of 2020. However, the Commonwealth Bank expects the next movement in the cash rate to be up, in November 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 200 INDEX

Dollar dives as RBA keeps door open on rate cut

Original article by David Rogers
The Australian – Page: 17 & 27 : 7-Feb-19

Reserve Bank of Australia governor Philip Lowe adopted a more dovish tone on monetary policy on 6 February. He used a National Press Club speech in Sydney to indicate that the RBA has the flexibility to reduce the cash rate if the outlook for unemployment and inflation makes such a move appropriate. The RBA had signalled in December that interest rates are more likely to rise than to fall. Lowe also said that the downturn in house prices is unlikely to affect economic growth.

CORPORATES
RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Next rates move still up, RBA insists

Original article by David Rogers, James Glynn
The Australian – Page: 19 & 28 : 6-Feb-19

The Reserve Bank of Australia has downgraded its forecast for economic growth in 2019 from 3.25 per cent to around three per cent, after leaving the cash rate unchanged at 1.5 per cent. The central bank has also advised that it now expects the unemployment rate to fall to around 4.75 per cent over the next several years, while it forecasts an underlying inflation rate of two per cent in 2019. Analysts expect official interest rates to remain on hold for some time.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, AUSTRALIAN BUREAU OF STATISTICS

Forecasters tipping RBA will cling to its tightening bias

Original article by Vesna Poljak
The Australian Financial Review – Page: 22 : 4-Feb-19

Andrew Ticehurst of Nomura expects the Reserve Bank of Australia’s board to retain its bias toward tightening monetary policy when it meets on 4 February. Ticehurst also forecasts that the central bank will scale back its economic growth and inflation forecasts. The general consensus of economists is that the RBA will leave the cash rate unchanged at 1.5 per cent throughout 2019, although financial markets have priced in the chance of a rate cut late in the year.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, RBC CAPITAL MARKETS, WESTPAC BANKING CORPORATION – ASX WBC, MARKET ECONOMICS PTY LTD, AMP CAPITAL INVESTORS LIMITED, INDUSTRY SUPER AUSTRALIA PTY LTD, CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Rates rise tipped but not soon

Original article by James Glynn
The Australian – Page: 27 : 31-Jan-19

There is general consensus in financial markets that the Reserve Bank of Australia will keep official interest rates on hold at 1.5 per cent in February. However forme RBA board member John Edwards says the next movement in the cash rate will be up rather than down, although this is will not happen in the near-term. He adds that the RBA’s economic growth and inflation forecasts for 2019 are "quite plausible".

CORPORATES
RESERVE BANK OF AUSTRALIA

Next rates move will be up: RBA’s Harper

Original article by James Glynn
The Australian – Page: 24 : 30-Jan-19

Reserve Bank of Australia board member Ian Harper has downplayed suggestions that the central bank could further reduce the cash rate. He says the strength of the domestic economy means that interest rates will rise, but stresses that this is his personal view. Meanwhile, Harper adds that there are no indications as yet that the downturn in residential property prices has prompted consumers to reduce their spending. Financial markets have priced in a better-than-even chance that the RBA will reduce the cash rate during 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL, COMMONWEALTH SECURITIES LIMITED

RBA will ignore gloom and stay a growth hawk

Original article by James Glynn
The Australian – Page: 23 : 25-Jan-19

The Reserve Bank of Australia is tipped to scale back its economic growth forecasts for 2019 and 2020, after GDP growth was just 2.8 per cent year-on-year in the December 2018 quarter. The RBA had previously forecast growth of 3.5 per cent for 2018. However, the central bank is expected to maintain its hawkish stance, given that the unemployment rate eased in December. The strong labour market also means an increase in the cash rate is more likely than a cut.

CORPORATES
RESERVE BANK OF AUSTRALIA

Aussie tipped to dive 15pc this year

Original article by Timothy Moore
The Australian Financial Review – Page: 31 : 25-Jan-19

Capital Economics has downgraded its forecast for the Australian dollar in 2019. The firm has warned that the currency could test $US0.60 and remain at around this level in 2020. It had previously expected the currency to trade at about $US0.65 in 2019 and $US0.70 in the following year. Capital Economics is also bearish about the outlook for Australia’s key export commodities, iron ore and coal, while it expects official interest rate cuts in 2019.

CORPORATES
CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Prices of big city houses to fall 25pc

Original article by Melissa Yeo
The Australian – Page: 26 : 24-Jan-19

Shane Oliver of AMP Capital says residential property prices in Melbourne and Sydney could fall by up to 25 per cent from peak to trough. Oliver had previously flagged a potential fall of up to 20 per cent, and he has warned that the downturn in the housing market could impact on Australia’s economic growth. Oliver also expects the Reserve Bank to reduce the cash rate by 25 basis points in August and November, although he says weak economic data could prompt it to move sooner.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, KPMG AUSTRALIA PTY LTD, DEMOGRAPHIA