MONETARY POLICY – AUSTRALIA

Signs of life in corporate investment: RBA

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Original article by David Rogers, James Glynn
The Australian – Page: 28 : 14-Nov-17

The Reserve Bank’s deputy governor Guy Debelle has told the UBS Australasia Conference that business investment outside of Australia’s mining sector has been stronger than official figures suggest in the last several years. He said the services sector in particular has recorded strong growth in capital investment, while there has also been an increase in public investment in infrastructure. Meanwhile, Debelle noted that a rise in the cash rate will be dependent on an increase in wages and inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

RBA can just sit back and watch the Fed

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Original article by Karen Maley
The Australian Financial Review – Page: 30 : 13-Nov-17

The latest monetary policy statements of the Reserve Bank and the Federal Reserve used identical wording to describe the current state of the Australian and US economies. The Federal Reserve is widely tipped to increase official interest rates again in December, which will allow the Reserve Bank to observe the impact of a rate rise in a low-inflation, low wages growth environment before taking any action of its own. There is no pressing need for the Reserve Bank to act, given that the unemployment rate remains well above that of the US and is not expected to fall in the next two years.

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

Growth hopes up as rates stay low

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Original article by David Uren
The Australian – Page: 2 : 8-Nov-17

Financial markets expect the Reserve Bank of Australia to leave official interest rates at 1.5 per cent until the second half of 2018, after it made no change to monetary policy on 7 November. RBA governor Philip Lowe noted that business conditions are improving, particularly the outlook for business investment in non-mining sectors of the economy. He also said growth in wages will remain low in the near-term but an upturn in the labour market will eventually have a flow-on effect, while he has forecast a further decline in the unemployment rate.

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

RBA held up by flagging inflation

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 2 : 26-Oct-17

Official data shows that growth in Australia’s headline consumer prices was below expectations at just 0.6 per cent in the September quarter, for an annual inflation rate of 1.8 per cent. Growth in the core inflation rate slowed to 0.3-0.4 per cent, compared with 0.5 per cent in the June quarter. The data has dampened expectations that the Reserve Bank will increase the cash rate in the near-term, with financial markets now pricing in a 36 per cent chance of a rate rise by May.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, COLES SUPERMARKETS AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, GOLDMAN SACHS AUSTRALIA PTY LTD, NOMURA AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY

Jobs market ‘a thing of beauty’ set to boost pay

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 23-Oct-17

More than 300,000 jobs have been created in Australia during the last year, but Chris Richardson of Deloitte Access Economics forecasts that this will slow to less than 200,000 in the next 12 months. He also expects wages to begin increasing, while inflation will continue to rise at a slow pace over the next several years. Richardson adds that official interest rates are likely to remain low for some time, while a range of factors suggest that business investment will increase.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, COMMONWEALTH SECURITIES LIMITED

Rate rise firming after stronger jobs growth

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Original article by David Rogers
The Australian – Page: 17 & 28 : 20-Oct-17

A rise in official interest rates may be on the agenda in 2018 after Australia’s unemployment rate fell from 5.6 per cent to 5.5 per cent in September 2017, with a higher-than-expected 19,800 jobs being created during the month. The economy has added 317,000 jobs in the last year, which is the highest annual rate of growth since August 2005. The Reserve Bank of Australia is widely tipped to leave interest rates on hold until at least 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED – ASX API

Reserve in no hurry to lift rates

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Original article by David Uren
The Australian – Page: 2 : 18-Oct-17

The minutes of the Reserve Bank of Australia’s board meeting for October suggest that the cash rate will remain at 1.5 per cent for some time. The central bank stresses that while the global trend toward monetary policy tightening is a "welcome development", it has no implications for Australian interest rates, which stayed much higher than in many nations in the wake of the global financial crisis. Meanwhile, the RBA anticipates that inflation will gradually move towards its target range.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF CANADA, BANK OF ENGLAND, EUROPEAN CENTRAL BANK

OECD predicts best growth in six years

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Original article by Geoff Winestock
The Australian Financial Review – Page: 3 : 21-Sep-17

The OECD has upgraded its forecast for global economic growth in 2018 by 0.1 per cent, to 3.7 per cent. However, Australia’s economic growth outlook remains unchanged, although the OECD noted the nation’s high housing prices. The Reserve Bank’s assistant governor, Luci Ellis, is also upbeat about the global economic outlook, noting that global growth should continue for some time in the absence of any major risk factors. Meanwhile, the ANZ Bank anticipates two increases in the cash rate during 2018.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED

Canada has hiked again – will the RBA follow?

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Original article by Patrick Commins
The Australian Financial Review – Page: 28 : 8-Sep-17

Vimal Gor of BT Investment Management says the Bank of Canada’s decision to increase official interest rates for the second time in 2017 has no implications for the Reserve Bank of Australia. However, Annette Beacher of TD Securities says both central banks have expressed similar views on their nations’ respective economies in recent monetary policy statements. Canada and Australia both have low inflation, low growth in wages, high household debt and high exchange rates, but a key difference is Canada’s much stronger growth in real GDP.

CORPORATES
BANK OF CANADA, RESERVE BANK OF AUSTRALIA, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, TD SECURITIES, ALTIUS ASSET MANAGEMENT PTY LTD, BLOOMBERG LP

Stability for Lowe’s first year at helm

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Original article by Philip Baker
The Australian Financial Review – Page: 36 : 6-Sep-17

Official interest rates have remained unchanged at 1.5 per cent during Philip Lowe’s first year as Reserve Bank of Australia governor. In contrast, the cash rate rose by 0.5 per cent during the first 12 months’ tenure of his predecessor, Glenn Stevens. Meanwhile, the next change in monetary policy is likely to be a rise in interest rates, although a number of economic indicators suggest that rates may stay on hold until late 2018.

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