MONETARY POLICY – AUSTRALIA

RBA delivers Turnbull a pre-election rate cut

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 4 : 4-May-16

The Australian sharemarket gained 2.1 per cent on 3 May 2016, after the Reserve Bank reduced the cash rate by 25 basis points to a record low of 1.75 per cent in the wake of a downturn in inflation. The ANZ Bank is the only "big four" bank that is yet to confirm that it will respond by reducing its mortgage interest rates. Meanwhile, Westpac and the Commonwealth Bank expect another official interest rate cut in August, although Goldman Sachs forecasts that rates will remain on hold until November.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Traders kiss goodbye to Aussie’s high hopes

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 29 : 29-Apr-16

The Australian dollar has retreated from recent highs after the latest inflation data showed that the CPI fell by 0.2 per cent in the March 2016 quarter. Currency traders now do not expect the currency to test the $US0.80 level in the near-term, while the inflation data has also heightened expectations of further monetary policy easing. However, currency strategists are divided about the outlook for the dollar, with year-end forecasts ranging from $A0.70 to $A0.78.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, HSBC AUSTRALIA HOLDINGS PTY LTD, MARKET ECONOMICS PTY LTD, CAPITAL ECONOMICS LIMITED, THINKFOREX

Deflation raises budget rate cut

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 28-Apr-16

The consumer price index fell by 0.2 per cent in the March 2016 quarter, with year-on-year growth of 1.3 per cent. The latest inflation data has raised the prospect that the Reserve Bank of Australia could cut official interest rates on 3 May, when the Federal Government will also deliver the 2016 Budget. National Australia Bank now expects the cash rate to be reduced in May, while financial markets now regard the chance of a rate rise to be 55 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, JP MORGAN AUSTRALIA LIMITED

Dollar overvaluation won’t provoke rate cut, says NAB

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Original article by Jessica Sier, Mark Mulligan
The Australian Financial Review – Page: 26 : 27-Apr-16

The Australian dollar has risen by more than 12 per cent since mid-January 2016. National Australia Bank’s Rodrigo Catril says the currency may be approaching previous levels at which the Reserve Bank had expressed "discomfort". The central bank responded to these concerns by reducing the cash rate, but NAB does not believe that the dollar’s current level will be sufficiently high for the RBA to cut interest rates in May. The latest inflation and jobs data will also influence the RBA’s monetary policy decision.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, OANDA AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Strong $A may force RBA’s hand

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Original article by David Rogers
The Australian – Page: 19 & 28 : 6-Apr-16

AMP Capital Investors’ Shane Oliver says the Reserve Bank of Australia is unlikely to increase the cash rate for some time. He says the prospect of slowing economic growth could prompt further easing of monetary policy in the near-term. The central bank left official interest rates on hold at two per cent on 5 April 2016, and gave indications that a further rise in the Australian dollar or an increase in unemployment could provide the impetus for a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD

RBA budget day cut ‘close’

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 8 : 4-Apr-16

The consensus of economists polled by Fairfax Media is for the Reserve Bank of Australia to leave official interest rates unchanged on 5 April 2016. However, about 25 per cent of the 12 economists expect the cash rate to be reduced on 3 May, when the Federal Government will also hand down the Budget. Some economists suggest that the recent rise in the value of the Australian dollar will prompt a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, FAIRFAX MEDIA LIMITED – ASX FXJ, NOMURA AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, CAPITAL ECONOMICS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

RBA give exporters no relief on $A

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 18-Mar-16

The Australian dollar has risen above $US0.76 for the first time in eight months and this trend is bad news for exporters. Tourism operators, services providers and education companies cannot count on a corrective action from the Reserve Bank of Australia. A decline in the unemployment rate, which fell from six per cent to 5.8 per cent in February 2016, will make the central bank less willing to cut the official interest rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

$A ignores RBA ‘jawboning’ and pushes to eight-month high

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Original article by Vanessa Desloires, Mark Mulligan
The Australian Financial Review – Page: 26 : 18-Mar-16

The Australian dollar was trading at $US0.7591 in late local trade on 17 March 2016. The local currency has been rising for some time and even words of caution by Reserve Bank of Australia assistant governor Guy Debelle failed to affect it. Debelle told a foreign exchange seminar in Sydney that Australia needs a weaker domestic currency.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, EUROPEAN CENTRAL BANK, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Spending spree lifts economy to highest speed in two years

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 3-Mar-16

The latest GDP data shows that the Australian economy grew by 0.6 per cent in the December 2015 quarter, and by three per cent year-on-year. The general consensus of economists was for annual growth of just 2.5 per cent. Economic growth was boosted by an increase in government and consumer spending, although the household savings rate fell to a post-global financial crisis low of 7.6 per cent. The stronger-than-expected economic growth rate will reduce the chances of further official interest rate cuts in the near-term.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, UBS HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RIO TINTO LIMITED – ASX RIO, GROUP OF SEVEN (G-7), ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Higher dollar not enough to kill RBA’s chill

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Original article by Vanessa Desloires, Mark Mulligan
The Australian Financial Review – Page: 3 : 29-Feb-16

There is general consensus among economists that the Reserve Bank will leave the cash rate unchanged at two per cent on 1 March 2016. Shane Oliver of AMP Capital is among the economists who expect an interest rate cut at some point in 2016. Meanwhile, the Commonwealth Bank’s Michael Blythe does not expect the central bank to resume "jawboning" the Australian dollar in its monetary policy statement, despite its recent rise to a seven-week high.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NOMURA AUSTRALIA LIMITED, BETASHARES CAPITAL LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN