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RBA, RBA Media Releases
blacksheep
post Posted: Aug 7 2018, 02:44 PM
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Media Release
Statement by Philip Lowe, Governor:
Monetary Policy Decision
Number2018-17
Date7 August 2018
QUOTE
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The global economic expansion is continuing. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth in China has slowed a little, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector. Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.

Financial conditions remain expansionary, although they are gradually becoming less so in some countries. There has been a broad-based appreciation of the US dollar over recent months. In Australia, money-market interest rates are higher than they were at the start of the year, although they have declined somewhat since the end of June. These higher money-market rates have not fed through into higher interest rates on retail deposits. Some lenders have increased mortgage rates by small amounts, although the average mortgage rate paid is lower than a year ago.

The Bank's central forecast for the Australian economy remains unchanged. GDP growth is expected to average a bit above 3 per cent in 2018 and 2019. This should see some further reduction in spare capacity. Business conditions are positive and non-mining business investment is continuing to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector.

Australia's terms of trade have increased over the past couple of years due to rises in some commodity prices. While the terms of trade are expected to decline over time, they are likely to stay at a relatively high level. The Australian dollar remains within the range that it has been in over the past two years.

The outlook for the labour market remains positive. The vacancy rate is high and other forward-looking indicators continue to point to solid growth in employment. Employment growth continues to be faster than growth in the working-age population. A further gradual decline in the unemployment rate is expected over the next couple of years to around 5 per cent. Wages growth remains low. This is likely to continue for a while yet, although the improvement in the economy should see some lift in wages growth over time. Consistent with this, the rate of wages growth appears to have troughed and there are increased reports of skills shortages in some areas.

The latest inflation data were in line with the Bank's expectations. Over the past year, the CPI increased by 2.1 per cent, and in underlying terms, inflation was close to 2 per cent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently. In the interim, once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower than earlier expected, at 1¾ per cent.

Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Sep 26 2016, 02:50 PM
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A second major project is the New Payments Platform. This project has been under the guidance of the Reserve Bank's Payments System Board. It is a cooperative effort between the Bank and the payments industry to modernise key parts of our electronic payments system.

When this work is completed we will all be able to make instantaneous payments to one another, with the money transferring between accounts in a matter of seconds, even if the funds have to move between banks. Addressing will be simplified; an email address or a mobile phone number will be able to be used instead of a payer needing to know an account number and BSB. We will also be able to send a lot more information with payments.

The first payments using this new system should be able to be made late next year. As one part of our contribution to this project, the Reserve Bank is building the necessary infrastructure to allow funds to be transferred between financial institutions in real time.

http://www.rba.gov.au/speeches/2016/sp-gov-2016-09-22.html



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Sep 1 2015, 04:54 PM
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In Reply To: nipper's post @ Sep 1 2015, 04:20 PM

Perhaps its time for the RBA to create its own plunge protection team!! rolleyes.gif

Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Sep 1 2015, 04:20 PM
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In Reply To: mullokintyre's post @ Sep 1 2015, 03:45 PM

and the ASX200 dropped 50 points from 2.30pm till close.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Sep 1 2015, 03:45 PM
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Well, Glen kept the rates right where they have been or the last four months.

From ABC News
QUOTE
The central bank has not been swayed by recent global market volatility, holding to its stance of further monitoring the Australian economy before deciding its next move.

"Equity markets have been considerably more volatile of late, associated with developments in China, though other financial markets have been relatively stable," RBA governor Glenn Stevens said in a prepared statement.

Mr Stevens said the economy should continue its modest expansion.

"While growth has been somewhat below longer-term averages for some time, it has been accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year," he said.

The RBA appears to be becoming more sanguine about exchange rates, noting: "The Australian dollar is adjusting to the significant declines in key commodity prices."

After the announcement the Australian dollar remained largely unmoved, trading at 0.7145 cent against the US dollar.


The bets on an interest rate decrease for next month however, are starting to be put on.

More data increasingly suggesting a slowing Chinese economy will put pressure on the AUD.
Most recent results on Chinese manufacturing show a further slowdown.

QUOTE
The official Purchasing Managers' Index (PMI) slipped to 49.7 from last month's reading of 50.

A figure below 50 indicates activity is contracting.

The figure from China's National Bureau of Statistics is the bellwether for large industrial enterprises, and follows an even weaker reading from the private Caixin "flash" PMI last month which lead to a savage sell of shares in Chinese and global markets.

The Shanghai composite index slide on the news and at 1:00pm (AEDT) was down 2 per cent.

ANZ's chief China economist Li-Gang Liu said he now expected third quarter GDP figures would show economic growth had slowed to 6.4 per cent, well below the official 7 per cent target.

"New orders and new export orders indices both declined 0.2 percentage points to 49.7 and 47.7, respectively, suggesting that both domestic and external demand remains weak," Dr Liu said.

Slowing China

Mick



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Said 'Thanks' for this post: nipper  
 
nipper
post Posted: Aug 31 2015, 10:38 PM
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Australia as China's Canary Means World Watching RBA's Heartbeat

QUOTE
Any investors wanting to gauge the severity of the global fallout from China's economic downturn could do worse than listen to what Australia's central bank says Tuesday.

The Reserve Bank of Australia manages the developed world's most exposed economy to China and until now signaled stock market volatility there wouldn't hurt Chinese consumption. While traders and economists predict Governor Glenn Stevens will keep interest rates unchanged at a record-low 2 percent tomorrow, wagers on a cut by December jumped to 65 percent Monday, from about 35 percent before China devalued the yuan Aug. 11.

"Of most interest will be any comments regarding recent financial market turbulence in relation to China and emerging-market driven worries and in particular whether this suggests a strengthened easing bias," said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd. "My view remains that the probabilities are skewed towards the RBA having to cut rates again at some point."

The stock market rout in China threatens not only Australian exports but also a fresh slump in confidence among consumers and businesses Down Under.

Company profits fell in the second quarter for the fifth time in a row, the longest stretch of declines for at least two decades, according to data released Monday by the Australian Bureau of Statistics. Firms are forecasting a 23 percent drop in investment in the fiscal year that began July 1, little changed from the 25 percent reduction they estimated three months ago, a government report last Thursday showed.

The central bank is unlikely to be much moved by the business spending data, having earlier this month predicted that investment outside the mining sector would likely remain subdued for some time; it's also flagged that the country's potential growth rate may have fallen from above 3 percent.....
... more ... & with pretty graphs

http://www.bloomberg.com/news/articles/201...g-rba-heartbeat



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


mullokintyre
post Posted: May 7 2013, 02:40 PM
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In Reply To: bam_bamm's post @ May 7 2013, 02:36 PM

Yeah I got the result right, but my reasoning as to why may well be wide of the mark. As I said, when there is only three outcomes, and one of those outcomes is an extremely long shot, you can fluke it.

Mick (basking in the glow of unearned glory).



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bam_bamm
post Posted: May 7 2013, 02:36 PM
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In Reply To: mullokintyre's post @ May 7 2013, 09:36 AM

you're a guru mick tongue.gif



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arty
post Posted: May 7 2013, 02:34 PM
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In Reply To: mullokintyre's post @ May 7 2013, 09:36 AM

Congrats Mick. You read it right: 25 bp cut to 2.75%



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
bam_bamm
post Posted: May 7 2013, 01:27 PM
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In Reply To: mullokintyre's post @ May 7 2013, 09:36 AM

thanks to both of you for your comments.

I am torn in my thinking. I am leaning towards a cut in either June or July.



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