RBA cash rate

[divs4ever]

I don't think all these tariff threats will make the greenback stronger. So if they go down, our dollar will be stronger or at least hold despite the cut in our interest rates. Not sure if I'm making sense or on the right track.

time will tell us who was right

Fear Uncertainty and Doubt ( FUD ) that looks like what is happening here

am still watching sovereign bonds because that is where i think they are trying to scare us to so the bigger banks can crystallize loses without having their arms and legs ripped off .

but hopefully the greenback looks stronger until i offload my SHV at my target price

 

[qldfrog]

Increased inflation in the USA, not here. why should it?

I am with you there, shouldn't we see an influx of even cheaper Chinese goods here in Australia?

 

[divs4ever]

I am with you there, shouldn't we see an influx of even cheaper Chinese goods here in Australia?

cheaper or better ( maybe even both ) and closer to the top of the list so maybe even the latest models , near release date

but .. nah , Albo will put his foot in it , to show he is big and tough

 

[farmerge]

I don't think all these tariff threats will make the greenback stronger. So if they go down, our dollar will be stronger or at least hold despite the cut in our interest rates. Not sure if I'm making sense or on the right track.

So much more sense than The Trumpet and his co-hort, the unelected POTUS, the Muskrat.

 

[mullokintyre]

Deutscte Bank reckon we are going to get 50BPS in May.
I would have thought such information would have caused a fall in the AUD, however it as actually gone the other way.
I find it strange, are they suggesting that all the tariff chaff being thrown around will send Inflation down?
I thought everyone said that tariffs were only going to increase the price of everything.
There is some weird **** going down.
Mick

Meanwhile the NAB has added to the chorus of experts predicting an emergency 50BPS cut from the RBA.



The same Author also said



I spent a fruitless ten minutes searching for something to corroborate the statement about Deutsche , but could find none.
And on a similar vein, the RBNZ cuts the NZ rate by 25BPS.
Mick

 

[eskys]

Watching our dollar creep up slowly and thinking is it possible the US is losing credibility and there's more demand for our dollar, i.e money coming into Aus for investment? Or is it because the commodities are up, hence our dollar is up...or is it because our dollar is up and commodities are up? Bit of an unconventional thought, but then again, I don't know how to think anymore. And, will it stay up tonight or tomorrow?

 

[farmerge]

Watching our dollar creep up slowly and thinking is it possible the US is losing credibility and there's more demand for our dollar, i.e money coming into Aus for investment? Or is it because the commodities are up, hence our dollar is up...or is it because our dollar is up and commodities are up? Bit of an unconventional thought, but then again, I don't know how to think anymore. And, will it stay up tonight or tomorrow?

@eskeys lets hope that "it" stays "up"

 

[mullokintyre]

Watching our dollar creep up slowly and thinking is it possible the US is losing credibility and there's more demand for our dollar, i.e money coming into Aus for investment? Or is it because the commodities are up, hence our dollar is up...or is it because our dollar is up and commodities are up? Bit of an unconventional thought, but then again, I don't know how to think anymore. And, will it stay up tonight or tomorrow?

The AUD is a highly traded currency, and you cannot read too much into the gyrations.
So much of the movement is due to sentiment and/or the trading thinking at the time.
Long term trends are governed by fundamentals however.
Long term, the AUD has been going down.
I expect that will continue.
Mick

 

[eskys]

That's what everyone's been saying, Mick. Can you share your thoughts why this is so?

 

[mullokintyre]

That's what everyone's been saying, Mick. Can you share your thoughts why this is so?

I am going to assume you mean the fact that I reckon the AUD is going down further, so thats what I will comment on.
1. I think history can teach us many things. Historically , whenever there is a recession, the AUD gets hammered. Because I think a recession is still coming, then I expect the AUD to go down.

2. If the experts are correct about the RBA doing a panic cut of 50 BPS in May, then the traders are going to see that as sign of further drops. The AUD no longer looks attractive, so out it goes.

3. The AUD is considered as proxy for commodities. If they go down, so does the AUD. if the biggest consumer of our commodities, China, is shut out of he biggest market for its products, then the price of commodities might be expected to go down, taking the AUD along with it.

Mick

 

[eskys]

Thank you, Mick, for your reply.

May is next month, and 50 basis points is a lot. Don't know if it's going to happen.

The tariff affecting our commodities ...in my mind, it's probably one of the biggest threat to our dollar (iron ore futures up at present)

 

[mullokintyre]

Thank you, Mick, for your reply.

May is next month, and 50 basis points is a lot. Don't know if it's going to happen.

The tariff affecting our commodities ...in my mind, it's probably one of the biggest threat to our dollar (iron ore futures up at present)

The biggest beef the US has with us is indeed beef.
At 4 billion for 2024, it is by some margin the biggest item by value.
There will be far greater affects felt in the agricultural sector than in iron ore or bauxite.
Some of what we export to the US will continue to be Tariff free - gold and silver bullion, copper REMS and a few others.
There is also the currency considerations to consider. the AUD is still around 5% down against the greenback, so there is half the tariff gone.
The RBA will be under enormous pressure to cut.
Whether it should is another issue.
The CPI figures for the March quarter come out on April 30th.
They will have significant impact on the RBA deliberations, as will the Labour Force stats due out on April 17th.
The recent decision by all parties to support a full pass through of CPI increases to the lower paid minimum wages will have the opposite effect.
I really don't know which they will go, or by what amount, but there are plenty who reckon they do.
Mick

 

[eskys]

Oh yes, I've forgotten about beef. Had my head wrapped up in the market, thinking that the graph looks like we've arrested (close enough to that) Flatlined.

Hope there'll be a cut, Mick. I look forward to that. If they do, I won't have to work too hard. Hope you benefit too, good luck.

 

[qldfrog]

Oh yes, I've forgotten about beef. Had my head wrapped up in the market, thinking that the graph looks like we've arrested (close enough to that) Flatlined.

Hope there'll be a cut, Mick. I look forward to that. If they do, I won't have to work too hard. Hope you benefit too, good luck.

Rate cut would be bad for people with 4 to 5% cash return or TD s, nor would it be good for the AUD so all imported good inc oil fuel at the petrol station , and the rest of imports which is .. everything we buy and is not services
And the asx..great news on release but banks profits will be lower so a month later not so rosy....
Not black and white

 

[divs4ever]

Meanwhile the NAB has added to the chorus of experts predicting an emergency 50BPS cut from the RBA.
View attachment 197245


The same Author also said


View attachment 197246
I spent a fruitless ten minutes searching for something to corroborate the statement about Deutsche , but could find none.
And on a similar vein, the RBNZ cuts the NZ rate by 25BPS.
Mick

but the RBNZ openly admit that NZ is struggling with a recession , not stalling , not gaslighting , not jawboning AND NZ has a very sweet trade agreement with China

one might wonder if other Central Banks are less honest/transparent

 

[mullokintyre]

Oh yes, I've forgotten about beef. Had my head wrapped up in the market, thinking that the graph looks like we've arrested (close enough to that) Flatlined.

Hope there'll be a cut, Mick. I look forward to that. If they do, I won't have to work too hard. Hope you benefit too, good luck.

On the one hand, a rate cut will be good for my kids and anyone else struggling with mortgages.
Whether a rate cut is even warranted is different.
It depends on why they cut.
Is it due to pressure from all sides, is it because they see inflation tamed, or if they see a recession coming on?
Rate cuts as a stimulus to business is only useful in the housing market.
If I am running a business in a recession where one of its major markets is in contraction, no amount of cheap money is going to help.
If you can't sell your widgets thats it.
My biggest fear is stagflation.
if the AUD falls, all the stuff we import will get dearer, and we import damn near everything except beef and agricultural products.
All the cars, the solar panels, the phones the TV's, the Wind farm blades and turbines they all become more expensive.

Edited to add the following:

For me personally, it would be bad cos I have a lot of cash ties up in TD's.
But then I have also bought a heap of bonds that were paying a coupon rate of 3%.
When interest rates were at their lowest, these were changing hands for near $20 above their strike price.
I have bought them any time they were under $80, which made the effective rate on $100 worth of bonds around 3.6% , and tax free.
If we get interest rates below 3%, they will get to at least par value, so i am looking at a cap gain of 20%, as well as interest at the 3% coupon rate.
Mick

 

[farmerge]

but the RBNZ openly admit that NZ is struggling with a recession , not stalling , not gaslighting , not jawboning AND NZ has a very sweet trade agreement with China

one might wonder if other Central Banks are less honest/transparent

@divs4ever No such thing as a honest bank, just thieving pr*cks

 

[eskys]

I thought seniors who rely on income from high interest rates will be the ones who'll be unhappy with lower rates. But if they have their money in term deposits, they won't be too unhappy (I hope) since the rates are guaranteed until the term expires.

Lower rates will attract money into the share market and those with mortgages; business owners will be happy with a rate cut. This will encourage businesses to invest in expansion, spending on equipment, hiring workers etc.

I won't hold my breath about a rate cut next month. Can't see why they would do that although lots of clothing retailers have gone under. Heard via grape vine that another clothing retailer is looking for a buyer.

Whatever will be will be, hope everyone will be happy what come may.......goodnight everyone, and thanks for the banter.

 

[Smurf1976]

I thought seniors who rely on income from high interest rates will be the ones who'll be unhappy with lower rates. But if they have their money in term deposits, they won't be too unhappy (I hope) since the rates are guaranteed until the term expires.

The big concern there would be the broader inflationary impact.

Lower income from term deposits when they're renewed is one thing.

An increase in the price of goods and services from another round of inflation would be a greater concern for most I expect.

Home buyers have similar issues. If you've already bought and aren't planning to upgrade then the mortgage interest rate is the primary concern. But if you're a first home buyer who hasn't bought yet, or you're looking to upgrade, then the prospect of another surge in house prices doesn't appeal even slightly.

So there's winners and losers.

 

[divs4ever]

I thought seniors who rely on income from high interest rates will be the ones who'll be unhappy with lower rates. But if they have their money in term deposits, they won't be too unhappy (I hope) since the rates are guaranteed until the term expires.

Lower rates will attract money into the share market and those with mortgages; business owners will be happy with a rate cut. This will encourage businesses to invest in expansion, spending on equipment, hiring workers etc.

I won't hold my breath about a rate cut next month. Can't see why they would do that although lots of clothing retailers have gone under. Heard via grape vine that another clothing retailer is looking for a buyer.

Whatever will be will be, hope everyone will be happy what come may.......goodnight everyone, and thanks for the banter.

well i abandoned parking spare cash in TDs about 8 years back ,

if i can't find a better outcome , in raw interest , i select a different strategy ( churn it in stocks/REITs , invest in long life physical commodities to at least keep up with real inflation )

i doubt the RBA will cut enough to move the needle ( consumer spending )

and the reduction in mortgage repayments soon vanish in other rising costs and charges