New housing loans drop 7.4pc in quarter

Original article by Samantha Bailey
The Australian – Page: 19 : 13-Dec-18

A new report from the Australian Prudential Regulation Authority shows that $89.2bn worth of new mortgage loans were written in the September quarter, which is 7.4 per cent lower than previously. However, authorised deposit-taking institutions have reported a 5.4 per cent increase in the total value of housing loans in the year to September. Chris Bedingfield of Quay Global Investors says the annual rate of house construction is now too high, given that banks are tightening their lending criteria. He adds that the Reserve Bank is now more likely to reduce rather than raise the cash rate.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, QUAY GLOBAL INVESTORS, RESERVE BANK OF AUSTRALIA

Expect the RBA to hold fire on rates

Original article by James Glynn
The Australian – Page: 27 : 13-Dec-18

The Reserve Bank is still more likely to tighten rather than ease monetary policy, despite recent comments by governor Philip Lowe. He was most likely just outlining how the central bank could be expected to respond – including the potential for quantitative easing – in the event of an economic downturn. Although the Reserve Bank is still concerned about issues such as an emerging credit crunch, the odds still favour a rate rise, although this is unlikely to be for some time.

CORPORATES
RESERVE BANK OF AUSTRALIA

RBA set to freeze rates trigger

Original article by Joyce Moullakis
The Australian – Page: 17 & 18 : 10-Dec-18

Factors such as Australia’s sluggish GDP growth in the September quarter and the outlook for the housing market have prompted some economists and market analysts to forecast that official interest rates will remain on hold until 2020. They include Paul Bloxham of HSBC and Daniel Blake and Chris Nicol of Morgan Stanley. However, Shane Oliver of AMP Capital expects the cash rate to be cut rather than increased, most likely in the second half of 2019.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIGROUP PTY LTD, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Reserve flags rate cut, cash splash

Original article by Adam Creighton
The Australian – Page: 1 & 8 : 7-Dec-18

The Reserve Bank of Australia’s deputy governor Guy Debelle has indicated that there is potential for further monetary policy easing. The central bank has left the cash rate unchanged at 1.5 per cent since August 2016, and it has signalled in the past that a rate rise is more likely than a cut. Debelle has also indicated that the RBA could adopt a quantitative easing policy if it is considered necessary in order to stimulate the economy. He has also praised Labor’s fiscal stimulus at the onset of the global financial crisis, saying it was a key factor in the resilience of the domestic economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, FITCH RATINGS LIMITED, BUSINESS COUNCIL OF AUSTRALIA, STANFORD UNIVERSITY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

With numbers like these, the only way is down for RBA

Original article by Adam Creighton
The Australian – Page: 2 : 6-Dec-18

The lower-than-expected GDP growth for both the September quarter and the year to September should be sufficient to ensure further easing of monetary policy. The Reserve Bank has consistently maintained that the cash rate is more likely to rise rather than fall, but a rate cut now seems more probable. However, the record level of household debt means a rate cut may have little impact on the economy or put much downward pressure on mortgage interest rates.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Weak wages a threat to Xmas sales

Original article by John Kehoe, Sue Mitchell
The Australian Financial Review – Page: 1 & 8 : 6-Dec-18

The latest GDP data shows that the Australian economy expanded by just 0.3 per cent in the September quarter, compared with economists’ expectations of 0.6 per cent growth. Economists have attributed the fall in consumer spending to low wages growth and raised concerns about the outlook for retail sales during the Christmas trading period. Recent research by the Australian Retailers Association and Roy Morgan found that Christmas spending will increase by 2.9 per cent in 2018. The GDP data may affect the timing of any change in official interest rates, but the federal government still expects to post a Budget surplus in 2019-20.

CORPORATES
AUSTRALIAN RETAILERS ASSOCIATION, ROY MORGAN LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MJ BALE, HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, RETAIL APPAREL GROUP PTY LTD, CITIBANK PTY LTD

Upbeat RBA welcomes higher wages

Original article by William McInnes, Tim Boyd
The Australian Financial Review – Page: 7 : 5-Dec-18

Reserve Bank of Australia governor Philip Lowe notes that the outlook for the labour market is positive and the unemployment rate likely to fall further. In a statement accompanying the central bank’s monetary policy decision, Lowe also welcomed signs of wages growth. The RBA left official interest rates on hold at 1.5 per cent for a record 28th month on 4 December, and Sally Auld of JP Morgan says the timing of a rate rise will depend on the outlook for wages. The consensus of economists polled by Bloomberg is that the cash rate will remain unchanged until at least the December 2019 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, BLOOMBERG LP, BIS OXFORD ECONOMICS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED

Challenge emerges to inflation target regime

Original article by Vesna Poljak
The Australian Financial Review – Page: 27 : 22-Nov-18

The Bank of Canada has signalled that it will undertake a review of alternatives to its inflation target of two per cent. Options that the central bank will consider include increasing the inflation target, targeting aggregate prices or nominal income, and adding a full employment objective. The move may increase pressure on the Reserve Bank of Australia to reappraise its own inflation target of 2-3 per cent. Some economists have argued that the RBA’s inflation target is too high, although many advocate the status quo.

CORPORATES
BANK OF CANADA, RESERVE BANK OF AUSTRALIA, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY

Wages data crucial factor for RBA interest rates decision

Original article by John Kehoe, Vesna Poljak
The Australian Financial Review – Page: 8 : 14-Nov-18

The general consensus of economists is for annual wage price index growth of 2.3 per cent when official data for the September quarter is released on 14 November. Paul Bloxham of HSBC says the Reserve Bank could potentially increase the cash rate sooner than expected if WPI growth is stronger than expected. HSBC forecasts that the cash rate will be increased in mid-2019, although financial markets generally do not expect a rate rise until at least November.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. FAIR WORK COMMISSION

RBA says it’s all systems go for booming economy

Original article by David Uren
The Australian – Page: 1 & 2 : 7-Nov-18

The Reserve Bank of Australia is upbeat about the outlook for the domestic economy, forecasting growth of 3.5 per cent in 2018 and 2019. The central bank also expects the unemployment rate to fall to 4.75 per cent over the next two years, while inflation is forecast to rise above its target range in 2019 to an average of 2.25 per cent. Meanwhile, RBA governor Philip Lowe says growth in wages will be gradual. The RBA has again left interest rates on hold, and financial markets do not anticipate any change in monetary policy until 2020.

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