RBA cash rate

[mullokintyre]

RBA boss, Michelle Bullock, has poured cold water on the 50 BPS demand when she said that the current volatility is not as bad as the GFC.
She strikes me as someone who will not be easily swayed by the noise of outside entities.
if there is to be a cut, I suspect it will be 25 rather than 50BPS.
Mick

 

[eskys]

CENTRAL BANKS​

• Fed increasingly likely to slow further cuts amid tariff uncertainty, with focus on inflationary pressures rather than weakening labor market (BBG)
• Cleveland Fed's Hammack says US financial markets functioning well despite recent Tariff volatility (BBG)
• Traders now expecting fewer rate cuts by year-end after Trump pauses higher reciprocal tariffs (RT)

 

[farmerge]

RBA boss, Michelle Bullock, has poured cold water on the 50 BPS demand when she said that the current volatility is not as bad as the GFC.
She strikes me as someone who will not be easily swayed by the noise of outside entities.
if there is to be a cut, I suspect it will be 25 rather than 50BPS.
Mick
View attachment 197293

@mullokintyre Will be intersting to see as 3 of the thieving banks have cut their rates on the assumption to 50points is a goer. And a raft of their subsidiary banks also.
That's how I read it anyway

 

[mullokintyre]

@mullokintyre Will be intersting to see as 3 of the thieving banks have cut their rates on the assumption to 50points is a goer. And a raft of their subsidiary banks also.
That's how I read it anyway

The banks can change their rates regardless of the RBA position.
They will do whatebver they think is best for their bottom line (meaning the bank execs bonus payments).
Mick

 

[farmerge]

The banks can change their rates regardless of the RBA position.
They will do whatebver they think is best for their bottom line (meaning the bank execs bonus payments).
Mick

@mullokintyre True but they all seem to be singing from the same song sheet, the RBA on the other hand maybe on a different sheet!!!

 

[Knobby22]

RBA boss, Michelle Bullock, has poured cold water on the 50 BPS demand when she said that the current volatility is not as bad as the GFC.
She strikes me as someone who will not be easily swayed by the noise of outside entities.
if there is to be a cut, I suspect it will be 25 rather than 50BPS.
Mick
View attachment 197293

The neutral level is probably at that 0.5 level so I agree with her. Also it gives her more in the kitty should another rate cut be required.

 

[Ferret]

I like the idea of a 0.35% cut.

That gets it down to 3.75% and we can be on nice 0.25% intervals. I find 4.1%, 3.85% etc very upsetting.

 

[divs4ever]

@mullokintyre Will be intersting to see as 3 of the thieving banks have cut their rates on the assumption to 50points is a goer. And a raft of their subsidiary banks also.
That's how I read it anyway

a half won't save Albo , too late for that

so MAYBE no half , Albo is having revenge on the banks

 

[divs4ever]

I like the idea of a 0.35% cut.

That gets it down to 3.75% and we can be on nice 0.25% intervals. I find 4.1%, 3.85% etc very upsetting.

interesting timing if that option is taken

i wonder what the consequences will be if that option is taken ( still way too late to help the battlers , of course )

 

[divs4ever]

@mullokintyre True but they all seem to be singing from the same song sheet, the RBA on the other hand maybe on a different sheet!!!

are you saying they coordinate ?

that sounds like a conspiracy theory

 

[farmerge]

are you saying they coordinate ?

that sounds like a conspiracy theory

@divs4ever Well only they woul know the answer to that and we would never know that.

 

[mullokintyre]

The labor market continues to defy gravity.
After last months “shock” fall in employment, half of them were recovered in this months report.
15 k full time jobs and 17k part time jobs.
The participation rate is also up, which has ticked the unemployment rate up as more people are encouraged to look for work.
Monthly hoursworked was unchanged from February, which is a little surprising given March had three more days than Feb.
The RBA minutes released this week said theat May would be an opportune time to reduce rates again, but the latest data suggests that it is unlikely to be 50 BPS.
Mick

 

[farmerge]

The labor market continues to defy gravity.
After last months “shock” fall in employment, half of them were recovered in this months report.
15 k full time jobs and 17k part time jobs.
The participation rate is also up, which has ticked the unemployment rate up as more people are encouraged to look for work.
Monthly hoursworked was unchanged from February, which is a little surprising given March had three more days than Feb.
The RBA minutes released this week said theat May would be an opportune time to reduce rates again, but the latest data suggests that it is unlikely to be 50 BPS.
Mick

Any drop will be beneficial than none.

 

[mullokintyre]

Next week the RBA board will be conducting their two day meeting to determine at what level they think interest rates should be.
The call for a 50bps drop seems to have been silenced somewhat , but the general consensus is that they will cut again.
I am not so sure.
The recent wages release from the ABS has perhaps put a dampener on it some more.
Public sector wages outpaced private sector wages.
Prior to the post 2020 beer bug wages surge, these levels were not seen since 2013.



Employment stats were released the same, showing unemployment unchanged, despite there being 26,300 new jobs added in April, with the more solid part being the 60k increase in full timr jobs versus a 29.5k drop in part time employment.

living costs have risen steeply for most sectors over the past two quarters.


In terms of the inflationary front, producer prices were up 0.9% for the quarter, and we have already seen a jump in the monthly CPI as at the March quarter CPI. I expect that trend to continue for the June quarter.
I am going to stick my neck out and bet there will be no interest rate rise this meeting.
Mick

 

[Dona Ferentes]

I think there are some good points there, but - wildcard - they would like a 3 handle, not 4.15%. Definitely not 50 bp but one drop and a longer pause. Remember, the preferred range is 2-4.

longer term

.
and animal spirits?? No drivers.

 

[mullokintyre]

The market seems to be indicating a hold in rates easing.
Mick

 

[Knobby22]

The market seems to be indicating a hold in rates easing.
Mick
View attachment 199530

Or does it really mean that bond investors want a larger risk differential aka USA?

I am ambivalent. I do think there is a case for one more - but after that?
Not sure why the banks are predicting four.

 

[divs4ever]

The market seems to be indicating a hold in rates easing.
Mick
View attachment 199530

my guesses are FX plays ( against other currencies ) or forced sales as internationals ( or locals with a large amount of international stocks ) are getting margin-squeezed

as much as i think the Australian economy is going nowhere ( pleasant ) i see others heading into difficulty faster

surely the gossip isn't 'Albo sanctioning China '

but just maybe it is $3+ million victims shifting assets into overseas trust vehicles ( fleeing from Aussie 'safe-havens ' looks a plausible explanation ) although that looks more than 200 odd sellers reducing

 

[Knobby22]

A quick round up of what the major bank economists are forecasting when it comes to the cash rate.

For today's decision:

• ANZ: 0.25% cut
• CBA: 0.25% cut
• NAB: 0.5% cut
• Westpac: 0.25% cut

And going forward after that:

• ANZ: 3.35% cash rate by August
• CBA: 3.35% cash rate by year-end
• NAB: cuts in July, August, November and February, taking cash rate to 2.6%
• Westpac: 3.35% cash rate by year-end

(From ABC)

 

[divs4ever]

A quick round up of what the major bank economists are forecasting when it comes to the cash rate.

For today's decision:

• ANZ: 0.25% cut
• CBA: 0.25% cut
• NAB: 0.5% cut
• Westpac: 0.25% cut

And going forward after that:

• ANZ: 3.35% cash rate by August
• CBA: 3.35% cash rate by year-end
• NAB: cuts in July, August, November and February, taking cash rate to 2.6%
• Westpac: 3.35% cash rate by year-end

(From ABC)

well no pre-election political pressure now

let us see what happens next