MONETARY POLICY – AUSTRALIA

RBA needs to cut official interest rate to 1.5pc: ANZ

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 25-Sep-15

The ANZ Bank says Australia’s unemployment rate of 6.2 per cent is unlikely to fall significantly in the near-term due to factors such as slowing global economic growth and the uncertain outlook for the Chinese economy. Chief economist Warren Hogan warns that the unemployment rate could potentially rise over the next year or so. ANZ believes that a combination of factors means the Reserve Bank will have to reduce the cash rate in both February and May 2016.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

$A overshoots as iron ore export volumes up again

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Original article by Mark Mulligan
The Australian Financial Review – Page: 26 : 10-Sep-15

The Australian dollar is trading at around $US0.70, having recently fallen to $US0.6896. However, Annette Beacher of TD Securities argues that the rebound in the iron ore price means the currency should be trading at the $US0.76 level. Meanwhile, Beacher says the Reserve Bank is likely to maintain the cash rate at two per cent in the wake of the currency’s recent downturn.

CORPORATES
TD SECURITIES, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, GROUP OF TEN (G-10)

RBA moves to cool housing will take time

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Original article by Jacob Greber
The Australian Financial Review – Page: 4 : 19-Aug-15

Reserve Bank of Australia’s minutes of the July 2015 board meeting suggest that the central bank is likely to continue to keep the official interest rate at its current record low. The fall in the Australian dollar of five per cent against the US currency in June 2015 is expected to stimulate exports. The central bank noted that low interest rates had led to house price inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BARCLAYS BANK PLC

Housing ‘fascination’ won’t make us rich

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 13-Aug-15

Almost 75 per cent of the increase in the ratio of net wealth to gross domestic product since the late 1980s is due to higher land prices. This is distinct from the value of houses built on that land, according to Reserve Bank of Australia deputy governor Philip Lowe, who claims Australia’s fascination with housing is in reality a fascination with land. He also concludes the obsession with property is not making the nation better off as a whole, with low interest rates implying low returns for savers and low underlying returns on assets.

CORPORATES
RESERVE BANK OF 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