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RBA cut fully priced as markets buckle on trade war – 14 May 2019

Australian Financial Review

The escalating trade war between the US and China has convinced financial markets that there will be a RBA interest rate cut in August, as 10-year government bond yields touched a fresh record low, the Australian dollar sagged, and the ASX skidded in response to a fresh bout of global market turmoil.

The probability of an Australian interest rate cut advanced after a turbulent session on Wall Street, with the Dow Jones Industrial Average closing down 617 points, or 2.4 per cent. The S&P 500 fell 2.4 per cent and the Nasdaq shed 3.4 per cent in Monday trading.

“The market has …

RBA defies global easing trend to hold rates steady – 2 April 2019

Australian Financial Review

The Reserve Bank of Australia on Tuesday kept rates on hold at 1.5 per cent, defying the global trend towards easier monetary policy even as it adopted a more cautious tone in the accompanying statement.

While Tuesday’s announcement was widely expected, there had been conjecture that the RBA would begin laying the rhetorical groundwork for lower rates later this year – an outcome already largely priced into financial markets.

Instead, governor Philip Lowe’s statement accompanying the decision remained largely unchanged and provided no explicit hints that the central bank was contemplating lower rates.

There was, however, evidence …

RBA keeps interest rates on hold – 5 March 2019

Australian Financial Review.

The official cash rate has been held at its record low of 1.5 per cent for the 28th time in a row suggesting the uncertainty in the economy continues but that a 3 per cent growth target is still achievable.

“The main domestic uncertainty continues to be the strength of household consumption in the context of weak growth in household income and falling housing prices in some cities,” the board said in its statement.

“The central scenario is still for the Australian economy to grow by around 3 per cent this year,” the board said pointing to rising business investment, higher levels …

RBA rates on hold in first meeting of 2019 – 5 February 2019

Australian Financial Review

 

The Reserve Bank of Australia has held the official interest rate steady at 1.5 per cent, acknowledging risks have increased and downgrading its outlook for the economy which is softening according to new data published Tuesday.

Following its first monetary policy meeting of 2019, RBA governor Philip Lowe said in a statement ​the central scenario is for the domestic economy to grow about 3 per cent this year and a little less in 2020, down from the 3.5 per cent it forecast in December.

Adding to its slightly less upbeat tone, the RBA said underlying inflation would take a “little …

Retirees angry about franking refunds are ‘perfectly entitled to vote against us’: Chris Bowen – 30 January 2019

Australian Financial Review

Shadow treasurer Chris Bowen said retirees unhappy with Labor’s plan to scrap cash payments for excess franking credits were free to take their vote elsewhere because the Opposition would not be backing down.

As the government builds pressure on Labor over the policy which could see up to 900,000 self-funded retiress lose income, Mr Bowen said the system in which people who pay no or little tax but receive a tax refund was neither fair nor sustainable.

Speaking on the ABC on Wednesday, Mr Bowen, in response to a complaint from a listener that he would be $5000 a year worse off, …

December quarter CPI at 0.5pc beats expectations – 30 January 2019

Inflation over the December quarter has marginally beaten economists forecasts thanks to a rise in the cost of tobacco, domestic holiday expenses and fruit.

The Australian Bureau of Statistics released its consumer price index data on Wednesday, showing a 1.8 per cent rise in inflation in the 12 months to December 2018 and a 0.5 per cent rise since the September 2018 quarter.

Economists predicted inflation would slow to 1.7 per cent on a year-on-year measure and 0.4 per cent over the December quarter. This is the first time in eight quarters that the CPI has beaten expectations.

“Today’s data confirms inflationary pressures in …