From Deutsche some good news for savers before the RBA snuffs it out again:
Average term deposit spreads for the majors (on “best rates” within the broadly defined short term and medium term categories) improved slightly during the last month. In both the short term and medium term categories spreads improved by 5bps. These trends reflect small reductions in the bank bill rates, and decreases in TD rates by WBC. WBC cut its best rate offers in the short and medium term categories by 15 and 25bps, respectively. These were the deposit specials that were first offered when WBC led the round of mortgage repricing in October 2015. For the regional banks/brands the average short term TD spreads were flat and medium term TD spreads deteriorated by 7bps. Bankwest and BOQ both increased their rates during the month.
Majors travelling OK but regionals clearly caught in an up trend. This will be rising wholesale funding costs forcing them to look elsewhere for funds plus maybe even a little flight to safety in the majors.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
