MONETARY POLICY – AUSTRALIA

Lowest rate since ’60s

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 10-Apr-15

The Reserve Bank of Australia is widely tipped to reduce the cash rate by 25 basis points to two per cent in May 2015. The cash rate is already at its lowest level in five decades, but economists maintain that further rate cuts can help to stimulate the economy. The Commonwealth Bank’s Michael Workman notes that the low level of confidence is a key issue for the economy, while Shane Oliver of AMP Capital says there is potential for more rate cuts beyond May

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, DELOITTE ACCESS ECONOMICS PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD

Economists stumped by RBA’s moves

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Original article by Vesna Poljak, Patrick Commins
The Australian Financial Review – Page: 3 : 9-Apr-15

None of the economists polled by Bloomberg News have been accurate in their forecasts for the monetary policy decisions of all three Reserve Bank of Australia board meetings so far in 2015. Several economists have, however, successfully predicted the outcome of two interest rate decisions, while five have failed to predict any. Meanwhile, the financial market’s forecasts have been right on one occasion in 2015

CORPORATES
RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, BARCLAYS BANK PLC, BT FINANCIAL GROUP PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, NOMURA AUSTRALIA LIMITED, RBC CAPITAL MARKETS, TD SECURITIES, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DEUTSCHE BANK AG, HSBC AUSTRALIA HOLDINGS PTY LTD, UBS HOLDINGS PTY LTD, BANK OF ENGLAND, LABOUR PARTY (GREAT BRITAIN)

RBA baulks at 2pc cash rate, for now

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 6 : 8-Apr-15

The Australian dollar rallied to $US0.7690 on 7 April 2015, after the Reserve Bank left the cash rate on hold at 2.25 per cent. There was widespread expectation among financial market watchers that the central bank would reduce the cash rate, but they have priced in a 76 per cent chance of a rate cut in May. Vimal Gor of BT Investment Management and Paul Dale of Capital Economics both believe that the Reserve Bank missed a chance to put downward pressure on the dollar

CORPORATES
RESERVE BANK OF AUSTRALIA, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CAPITAL ECONOMICS LIMITED, STANDARD AND POOR’S ASX 200 INDEX, JAMIESONCOOTEBONDS PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Pre-emptive $A spike attracts ASIC interest

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Original article by Vesna Poljak
The Australian Financial Review – Page: 26 : 8-Apr-15

The Australian Securities & Investments Commission will investigate further unusual currency trading activity on 7 April 2015. The Australian dollar again rose suddenly shortly before the Reserve Bank revealed that it had left the cash rate on hold. The corporate regulator is looking into similar trading activity in the previous two months. The dollar was buying $US0.7699 late in trading, and Richard Yetsenga of the ANZ Bank expects it to remain at around this level in the near-term

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF INDIA, EUROPEAN CENTRAL BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Shares to open lower as RBA considers cut

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Original article by Mark Mulligan
The Australian Financial Review – Page: 29 : 7-Apr-15

Futures traders expect the Australian sharemarket to shed 0.15 per cent when trading resumes on 7 April 2015. The benchmark S&P/ASX 200 fell by 0.4 per cent during the previous week. The Reserve Bank’s monthly board meeting will be a focus for investors, with Credit Suisse data showing that financial markets have priced in a 75 per cent chance of a rate cut. Retail sales, construction and mortgage lending data will also be released in coming days

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, CREDIT SUISSE (AUSTRALIA) LIMITED, BLOOMBERG LP, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, THE AUSTRALIAN INDUSTRY GROUP, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, SOCIETE GENERALE, OANDA AUSTRALIA PTY LTD, JP MORGAN AUSTRALIA LIMITED

Iron ore slump forces RBA to mull April cut

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 1-Apr-15

The price of iron ore shed 16 per cent during March 2015, and it is now trading below $US53 per tonne. The slump has heightened expectations that the Reserve Bank of Australia will reduce the cash rate on 7 April, and financial markets have priced in a 68 per cent chance of a cut. Kieran Davies of Barclays is among the economists who expect a rate cut in April, although Westpac’s Bill Evans believes that the cash rate may be left on hold until May

CORPORATES
RESERVE BANK OF AUSTRALIA, BARCLAYS BANK PLC, WESTPAC BANKING CORPORATION – ASX WBC, ROYAL BANK OF CANADA, RATECITY PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, TD SECURITIES

Eslake breaks ranks with rates call

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 29 : 17-Mar-15

The Australian dollar was buying $US0.764 late in trading on 16 March 2015, ahead of the release of the minutes from the Reserve Bank’s monthly board meeting. Bank of America Merrill Lynch economist Saul Eslake expects the cash rate to be reduced by 25 basis points in May, followed by rate rises in both December and February. He also forecasts that the dollar will be trading at $US0.73 in December and $US0.68 by the end of 2016

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, BLOOMBERG LP, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, ING AUSTRALIA HOLDINGS LIMITED

Spike in $A seconds before rates call

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Original article by Sally Rose, Jonathan Shapiro, Gareth Hutchens
The Australian Financial Review – Page: 10 : 5-Mar-15

Concerns about insider trading in the foreign exchange market has intensified after the Australian dollar rose by 0.5 per cent less than a minute before the Reserve Bank announced that the cash rate would remain on hold in March 2015. The currency had fallen by 0.8 per cent only seconds before the previous rate announcement in February. Currency experts such as the Commonwealth Bank’s Richard Grace support the Australian Securities & Investments Commission’s decision to investigate the irregular trading activity

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, BLOOMBERG LP, THOMSON REUTERS PLC

Rate pause clobbers share prices

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Original article by Jacob Greber, Max Mason
The Australian Financial Review – Page: 1 & 8 : 4-Mar-15

The Australian sharemarket fell sharply and the dollar rallied after the Reserve Bank defied expectations and left official interest rates on hold on 3 March 2015. The benchmark S&P/ASX 200 Index ended the session at 5,933.9 points, and Tony Paterno of Ord Minnett says it is now unlikely to breach the 6,000-point level in the near-term. The central bank has maintained its easing bias, with governor Glenn Stevens indicating that there may be further rate cuts if this is deemed appropriate

CORPORATES
RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, ORD MINNETT GROUP LIMITED, DEUTSCHE BANK AG, AUSBIL INVESTMENT MANAGEMENT LIMITED, CONTANGO ASSET MANAGEMENT LIMITED, RP DATA LIMITED, CORELOGIC AUSTRALIA PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, UBS HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Stunned traders caught in the glare of ASX200’s headlights

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Original article by John Wasiliev
The Australian Financial Review – Page: 28 : 3-Mar-15

The Australian sharemarket reached its highest level in seven years on 2 March 2015, ahead of the Reserve Bank’s monthly board meeting. More than 50 per cent of economists expect the central bank to reduce the cash rate again, after a 25 basis point cut in February. However, opinion is divided as to whether the benchmark S&P/ASX 200 will breach the 6,000-point level in the near-term

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CMC MARKETS PTY LTD, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, TELSTRA CORPORATION LIMITED – ASX TLS, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, FAIRFAX MEDIA LIMITED – ASX FXJ, WORLEYPARSONS LIMITED – ASX WOR, TOLL HOLDINGS LIMITED – ASX TOL, WOOLWORTHS LIMITED – ASX WOW, MYER HOLDINGS LIMITED – ASX MYR, WESFARMERS LIMITED – ASX WES, IG MARKETS LIMITED, OANDA AUSTRALIA PTY LTD, THINKFOREX