MONETARY POLICY – AUSTRALIA

Bets mount on second cash rate cut in weeks

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Original article by Mark Mulligan
The Australian Financial Review – Page: 22 : 2-Mar-15

Futures traders expect the Australian sharemarket to lose ground when trading resumes on 2 March 2015. With the reporting season over, investors are likely to focus on economic data to be released in the coming week, as well as the Reserve Bank’s monthly board meeting. The recent release of disappointing capital expenditure data has heightened speculation that the central bank could reduce the cash rate again in March, following a 25-basis point cut in February

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBS HOLDINGS PTY LTD, PEOPLE’S BANK OF CHINA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX, WOOLWORTHS LIMITED – ASX WOW

Interest rate cut has instant impact at property auctions

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 5 : 16-Feb-15

Preliminary data shows that Sydney’s residential property market achieved an auction clearance rate of 77.9 per cent on the weekend of 14-15 February 2015, down from 80.5 per cent for the previous week. Melbourne’s preliminary auction clearance rate rose from 66.3 per cent to 67.4 per cent, while the national clearance rate rose from 67.3 per cent to 70 per cent. Mortgage Choice notes that the interest rate cut in February has resulted in a sharp rise in applications for home loans

CORPORATES
MORTGAGE CHOICE LIMITED – ASX MOC, RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, RP DATA LIMITED, AUSTRALIAN PROPERTY MONITORS PTY LTD, JP MORGAN AUSTRALIA LIMITED, McGRATH ESTATE AGENTS, JELLIS CRAIG AND COMPANY

ASX revving as results season hits high gear

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Original article by Bianca Hartge-Hazelman
The Australian Financial Review – Page: 20 : 16-Feb-15

Futures traders expect Australia’s S&P/ASX 200 to advance 29 points when trading resumes on 16 February 2015. The benchmark index closed at a seven-year high of 5,877.5 on 13 February. A number of blue-chip stocks are slated to release their latest financial results in the coming week, while the prospect of further monetary policy easing should also bolster sentiment toward equities. Meanwhile, the Australian dollar has fallen to $US0.7744 and it is widely tipped to lose more ground

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AMCOR LIMITED – ASX AMC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FORTESCUE METALS GROUP LIMITED – ASX FMG, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, WESFARMERS LIMITED – ASX WES, CITIGROUP PTY LTD, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RIO TINTO LIMITED – ASX RIO, TELSTRA CORPORATION LIMITED – ASX TLS

Jobless jump points to rate cut

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

The Australian economy shed more than 12,000 jobs in January 2015, with the unemployment rate rising to 6.4 per cent. The jobless rate’s rise to its highest level in 12 years weighed heavily on the Australian dollar, which reached a low of $US0.7662 on 12 February. The data also prompted speculation of further interest rate cuts, while business groups say the figures demonstrate the need for industrial relations reforms

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIAN BUREAU OF STATISTICS, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, AUSTRALIAN GREENS

$A plunges as investors bet on rate cut in March

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Original article by Misa Han
The Australian Financial Review – Page: 23 : 13-Feb-15

The Australian dollar was buying $US0.7646 late in trading on 12 February 2015. The currency was sold down in response to data showing that Australia’s unemployment rate rose to 6.4 per cent in January, with the economy shedding more than 12,000 jobs during the month. The jobs data has heightened expectations of further easing of monetary policy, and Paul Bloxham of HSBC expects the currency to continue to retreat

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Telstra, Stockland and big four to benefit from rate cut

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Original article by Max Mason
The Australian Financial Review – Page: 23 : 6-Feb-15

More investors are expected to embrace equities as a result of the interest rate cut on 3 February 2015, due to low yields on government bonds and bank deposits. George Boubouras of Contango Asset Management notes that stocks such as banks, telcos, consumer staples and infrastructure typically rise in response to an interest rate cut. Healthy dividend yields means the four major banks and Telstra in particular are likely to receive continued strong support from investors

CORPORATES
CONTANGO ASSET MANAGEMENT LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, STOCKLAND – ASX SGP, DEXUS PROPERTY GROUP – ASX DXS, RESERVE BANK OF AUSTRALIA, PLATYPUS ASSET MANAGEMENT PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED

Rate cut fires up shares

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Original article by Jacob Greber, Vesna Poljak
The Australian Financial Review – Page: 1 & 6 : 4-Feb-15

The Australian dollar fell to its lowest level since the global financial crisis after the Reserve Bank reduced the cash rate to 2.25 per cent on 3 February 2015. Several smaller banks have reduced their standard variable mortgage rates by the full 25 basis points, although the four major banks have yet to respond. Federal Treasurer Joe Hockey says they should do so, adding that he expects the central bank to further reduce the cash rate in coming months. Factors such as the slowing economy and weak consumer sentiment contributed to the rate cut

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, STANDARD AND POOR’S ASX 200 INDEX, AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED – ASX API, PRICELINE PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ, MEMBERS EQUITY BANK PTY LTD, ING DIRECT, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, INTERNATIONAL MONETARY FUND, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, TRANSURBAN GROUP LIMITED – ASX TCL

Property powerhouses set the pace on price rises

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Original article by Turi Condon
The Australian – Page: 5 : 3-Feb-15

Figures from CoreLogic RP Data show that house prices in Sydney and Melbourne increased by 1.4 per cent and 2.7 per cent respectively in January 2015. The Perth, Adelaide and Darwin property markets recorded house price declines during the month. CommSec’s Craig James says the Reserve Bank will consider the state of the residential property market when deciding whether to reduce the cash rate on 3 February

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, RP DATA LIMITED, COMMONWEALTH SECURITIES LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MERITON APARTMENTS PTY LTD, RESERVE BANK OF AUSTRALIA

Market divided over rate cut

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Original article by Jacob Greber
The Australian Financial Review – Page: 8 : 3-Feb-15

Opinion is divided on the likely outcome of the Reserve Bank of Australia’s board meeting on 3 February 2015. The majority of analysts polled by Bloomberg News expect the cash rate to be left at 2.5 per cent, although the futures market has priced in a 66 per cent chance of a rate cut. Former Reserve Bank governor Bernie Fraser says a rate cut should be implemented sooner rather than later. A number of the Reserve Bank’s peers have eased monetary policy in recent months

CORPORATES
RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, AUSTRALIAN NATIONAL UNIVERSITY

Dollar to stay below US80c at year end

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 22 : 30-Jan-15

The Australian dollar was fetching $US0.7858 late in trading on 29 January 2015, after peaking at $US0.8022 on the previous day. Gavin Friend of National Australia Bank expects the currency to be trading at the $US0.78 level at the end of 2015, while Richard Grace of the Commonwealth Bank has a more bearish year-end forecast of $US0.76. There is growing expectation that the Reserve Bank will reduce the cash rate on 3 February

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, SWISS NATIONAL BANK, FOREX.COM, UNITED STATES. FEDERAL RESERVE BOARD, CENTREBET INTERNATIONAL LIMITED, WESTERN UNITED LIMITED, COMMONWEALTH SECURITIES LIMITED, WESTPAC BANKING CORPORATION – ASX WBC