MONETARY POLICY – AUSTRALIA

Dipping Australian dollar tipped to drop below US60c

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Original article by Vesna Poljak
The Australian Financial Review – Page: 28 : 21-Jul-15

Deltec International Group’s Atul Lele says further interest rate cuts and fiscal policy easing are needed in Australia due to the country’s uncertain economic outlook. He says the economic downturn in Canada is likely to be replicated in Australia, and forecasts that the Australian dollar will fall below the $US0.70 level by the end of 2015. He also warns of the potential for it to fall below $US0.60.

CORPORATES
DELTEC INTERNATIONAL GROUP, BANK OF CANADA

Canada, NZ moves point to more RBA rate cuts

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Original article by Jacob Greber, Vesna Poljak
The Australian Financial Review – Page: 1 & 8 : 17-Jul-15

The Australian dollar reached a low of $US0.7354 on 16 July 2015, after the Bank of Canada reduced its cash rate to 0.5 per cent. The Reserve Bank of New Zealand is widely tipped to ease monetary policy in July, and economists suggest that this may prompt further rate cuts in Australia before the end of the year. Citigroup anticipates a rate cut of 25 basis points in November, while Deutsche Bank forecasts that the Australian dollar will test the $US0.65 level by the end of 2016.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF CANADA, RESERVE BANK OF NEW ZEALAND, CITIGROUP PTY LTD, DEUTSCHE BANK AG, ROYAL BANK OF CANADA, UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD

Job figures spur speculation the worst is over

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 10-Jul-15

New data from the Australian Bureau of Statistics shows that the economy added 120,700 jobs during the first six months of 2015, with an average of 20,000 new jobs created each month. The unemployment rate was six per cent in June, prompting the Reserve Bank to note in its latest monetary policy statement that unemployment has ceased rising. Paul Bloxham of HSBC says the jobs data will make further interest rate cuts less likely in the near-term.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY

Economists adjust bets on another rate cut

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Original article by Mark Mulligan
The Australian Financial Review – Page: 31 : 9-Jul-15

The interest rate swap market has priced in an 88 per cent chance that the Reserve Bank of Australia will reduce the cash rate by 25 basis points by the end of 2015. The market now also regards a rate cut in April 2016 as a certainty. Andrew Ticehurst of Nomura Australia expects an interest rate cut in November, while Paul Dales of Capital Economics also anticipates further monetary policy easing.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, CAPITAL ECONOMICS LIMITED

RBA likely to hold as no vote drives down Aussie

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 7-Jul-15

The shadow board of the Reserve Bank of Australia estimates that there is a 57 per cent chance that the central bank will leave the cash rate unchanged on 7 July 2015. Shadow board chairman Timo Henckel says the economic outlook for China is a bigger issue for Australia than the debt crisis in Greece. The Australian dollar’s fall below $US0.76 in the wake of Greece’s referendum will be welcomed by the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN NATIONAL UNIVERSITY, UNIVERSITY OF MELBOURNE, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

All eyes on Greece as markets await result

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Original article by Rose Powell
The Australian Financial Review – Page: 22 : 6-Jul-15

Australia’s benchmark S&P/ASX200 Index shed 0.14 per cent in the week ended 3 July 2015. The debt crisis in Greece and the country’s referendum referendum are likely to be the key issue for investors when trading resumes on 6 July. Meanwhile, Stephen Walters of JP Morgan expects the Reserve Bank to leave the cash rate unchanged on 7 July, while Rob Rennie of Westpac forecasts that the Australian dollar will fall below $US0.75 in the near-term.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

RBA tool blunted: ANZ

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 21 : 22-Jun-15

The Reserve Bank of Australia’s policy of reducing interest rates was intended to encourage consumers to spend. However, ANZ Bank economists have concluded that people nearing retirement are in fact saving rather than spending. They also note that older Australians are also saving more as a result of uncertainty concerning superannuation policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

RBA must cut again to weaken $A as Fed takes dovish view

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Original article by Vesna Poljak
The Australian Financial Review – Page: 24 : 19-Jun-15

Many Australian economists now expect the US Federal Reserve to delay a rate cut until December 2015, in the wake of its June monetary policy meeting. The central bank gave indications that any rate rises over the next several years will be at a slower pace than previously expected. This in turn has heightened expectations that the Reserve Bank will further reduce interest rates, in order to put downward pressure on the Australian dollar.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD

‘Crazy’ house prices won’t halt rate cut

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Original article by Jacob Greber, Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 11-Jun-15

There has been a 39 per cent increase in residential property prices in Sydney over the last three years. HSBC’s Paul Bloxham estimates that the cost of buying a house in Sydney has risen to around 5.5 times annual income over the last 10 years. In contrast, the cost of home ownership across Australia has remained steady at about 4.1 times income. Reserve Bank governor Glenn Stevens has not ruled out further interest rates, despite the fact that doing so could put further upward pressure on house prices, particularly in Sydney.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, HOUSING INDUSTRY ASSOCIATION LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY

Grim GDP figures may mean further rate cuts

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Original article by Vesna Poljak
The Australian Financial Review – Page: 18 : 2-Jun-15

The general expectation of economists is that Australia recorded GDP growth of about 0.6 per cent in the March 2015 quarter. However, Citigroup has forecast real GDP growth of just 0.5 per cent, while Damien Boey of Credit Suisse says there is the potential for GDP on a nominal basis to contract in the first two quarters of calendar 2015. Boey says the GDP outlook may prompt the Reserve Bank to further reduce the cash rate in the near-term.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL RESERVE BANK OF ATLANTA