MONETARY POLICY – AUSTRALIA

Volatile $A could hit US67c as further downside plays out

roymorgansocial Leave a comment

Original article by Jessica Sier
The Australian Financial Review – Page: 26 : 10-May-16

Some currency experts have suggested that the recent sharp downturn in the value of the Australian dollar could continue. Mark Walton of BNP Paribas says the currency could fall to around $US0.67 if the Reserve Bank pursues further monetary policy easing. However, Robert Rennie of Westpac says the currency’s sell-off has been "rapid and unexpected", and he adds that it may find support from investors at around the $US0.73 to $US0.735 level.

CORPORATES
BNP PARIBAS SA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, STANDARD AND POOR’S CORPORATION

Turnbull’s biggest economic landmines

roymorgansocial Leave a comment

Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 9-May-16

A number of factors may affect the election prospects of Prime Minister Malcolm Turnbull on 2 July 2016. The Reserve Bank holds its next monetary policy meeting on 7 June. While rating agencies are unlikely to downgrade Australia’s credit rating during the election campaign, Turnbull will be concerned about the possibility of Australia being placed on credit watch in the wake of the Budget. Economic data to be released during the 56-day campaign include the national accounts for the March quarter and jobs data for both May and June.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE

Rates cut, fiscal plan keep real estate ticking

roymorgansocial Leave a comment

Original article by Michael Bleby
The Australian Financial Review – Page: 6 : 5-May-16

Angus Raine, the executive chairman of Raine & Horne, says the Reserve Bank’s move to reduce the cash rate to 1.75 per cent should attract first-time buyers back to the property market. Most experts do not expect the rate cut and the Australian Government’s May 2016 Budget to have much impact on activity in the residential market, but some suggest that the new rules on superannuation fund balance transfers will prompt increased demand for lower-priced commercial properties.

CORPORATES
RAINE AND HORNE PTY LTD, RESERVE BANK OF AUSTRALIA, CBRE PTY LTD, CENTURY 21 REAL ESTATE, RAY WHITE REAL ESTATE, SECRET AGENT PROPERTY SERVICES

RBA says rate cut won’t boost house prices

roymorgansocial Leave a comment

Original article by Su-Lin Tan
The Australian Financial Review – Page: 5 : 4-May-16

The Housing Industry Association has urged Australia’s major mortgage lenders to match the Reserve Bank’s 25 basis point reduction in the cash rate. Property industry experts say the new cash rate of 1.75 per cent will encourage first-home buyers to enter the property market, while LJ Hooker CEO Grant Harrod adds that it will bolster the housing markets of capital cities that are underperforming. The central bank does not expect the rate cut to significantly increase house prices.

CORPORATES
RESERVE BANK OF AUSTRALIA, HOUSING INDUSTRY ASSOCIATION LIMITED, LJ HOOKER (AUSTRALIA) PTY LTD, CORELOGIC AUSTRALIA PTY LTD, RP DATA LIMITED, RATECITY PTY LTD, FINDER.COM.AU, MORTGAGE CHOICE LIMITED – ASX MOC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, THE REAL ESTATE INSTITUTE OF QUEENSLAND LIMITED

RBA delivers Turnbull a pre-election rate cut

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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’

roymorgansocial Leave a comment

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