Australian interest rates

Morgan Stanley thinks so: RBA’s Rock and a Harder Place After a big month in Australian macro, the RBA left the policy bias ‘on hold’, but noted weaker real income and consumption trends.

From the RBA today: At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

So much for rising inflation!

Sheesh: BankWest, a subsidiary of Commonwealth Bank of Australia, will today announce a 76 basis point interest rate rise for principal and interest home buyers, the latest twist in lenders’ attempts to slow borrowing and lower risk of bad debt on loan books as market sentiment sours.

Via Macquarie: Australia-US bond yield differential going negative?  We think there is an even chance that Australian-US sovereign bond yield spreads fall below zero across the entire term structure (both short and long end) and potentially remain this way into late 2018.

ANZ has some good news for us.

Via AFR: One of the nation’s biggest mutual lenders has cut interest-only loans in half and hiked interest rates by 40 basis points, heralding a tough new phase in attempts to cut back on risky borrowing.

Via Yahoo comes the Kouk: The pressure is building for the Reserve Bank to cut interest rates.

APRA released its quarterly property exposures data yesterday and it showed a small slowing in interest-only lending to 36% of new loans: And 39% of the stock: It has to fall to 30% to meet macroprudential 2.0.

Via Domainfax: Westpac’s latest changes, which will also apply to Bank of Melbourne, BankSA and St George Bank, will from next Monday raise minimum deposits for interest-only borrowers to 20 per cent.

By Leith van Onselen There are arguably few better businesses to be in than Australian superannuation.

Via AFR: AMP and other property lenders are announcing a new round of rate rises for interest-only loans of up to 28 basis points and doubling mortgage minimum deposits in the latest round of tightening.

While the fake debate over this guarantee or that levy persists, one thing that is happening for real is that Aussie bank funding costs appear to have passed the low point of the cycle and are climbing.

A quick final post for the week before I fall back into bed.

Fake news alert: Commonwealth Bank of Australia, the nation’s largest lender, is easing up on some investor property loans as rivals raise rates, increase deposits and tighten other lending conditions.

Lordy: • In our opinion, economic imbalances in Australia have increased due to  strong growth in private sector debt and residential property prices in  the past four years, notwithstanding some signs of moderation in growth  in recent weeks.

28 days after the last rate hike comes golly: Westpac Banking Corp is set to increase rates on new fixed, investor interest-only loans, sources told Street Talk.

From Credit Suisse today: ■ Great headlines.

Let it go, Hasan, from Credit Suisse: Markets are set to enter ‘risk-off mode’ in the near-term with the level of political uncertainty in the US continuing to rise.

Via AFR: Westpac is following interest-only loan rate rises with new clamps on consumer credit, including restrictions on the number of dwellings on a title and tougher conditions for parent loan guarantees.

Precisely 19 days after the last hike, via News: ONE of the nation’s largest lenders ANZ is clamping down further on interest-only loans and making it tougher for both owner occupiers and investors.

Bloody ABC.

Via The Australian: The Turnbull government has warned the big five banks not to lie to their customers if they pass on a new $6 billion levy, AAP reports.

I did warn you about NAB: National Australia Bank is slugging interest-only owner occupier and residential property investors up to 50 basis points, but has cut rates for some principal and interest buyers.