Australian interest rates

The RBA and APRA better sort out what’s happening to the CoreLogic housing index quick smart because it is going nuts in Sydney and Melbourne: Yet APRA recently said: …some economists suggested APRA might need to step up its efforts to ensure banks are lending prudently.

New RBA Governor Phil Lowe makes a good start today in his first speech: Remarks to the Asian Development Bank – Institute of Global Finance International Conference I would like to welcome you all to Sydney to this important conference.

From Macquarie:  Was August a mistake? The RBA has delivered 50bp of rate cuts since May. However, recent trends in the economy point to GDP growth accelerating to its fastest pace in four years (see: Aussie Macro Moment – BoP review – GDP to crack 3.5%).

The RBA has held interest rates today.

From Domain yesterday: A four-bedroom beachfront house on Byron Bay’s picturesque Belongil Beach is on sale with an expected price of up to $5.4 million.

Melbourne Institute monthly inflation for August is out and manged to flop into the positive at 0.2%.

From the RBA: The incoming Governor, Philip Lowe, today welcomed the appointment by the Treasurer of Dr Guy Debelle to the position of Deputy Governor of the Reserve Bank of Australia and as a member of the Reserve Bank Board.

By Leith van Onselen In a speech yesterday, APRA’s chairman, Wayne Byres, played down the prospect of the regulator further tightening investor lending caps below 10%.

This is kind of obvious from Deutsche but it’s nonetheless charted in a way to give it substance:  Going into the RBA’s May Board meeting we thought that the Bank would focus on the relatively robust activity side of the economy and elect not to cut the cash rate.

See part 1: Deep T.

From Morgan Stanley: Rotation Risk for Bond Proxies Last month we increased portfolio allocations to resource and emerging market (EM) equities given a more favourable outlook for commodities, a more dovish Fed and our expectation of less aggressive USD appreciation.

Official interest rates are heading negative everywhere that public and private debt levels are at record highs on every measure.

From the AFR: European investors, pension funds and insurance companies traumatised by negative benchmark interest rates are looking at Australia as an “undiscovered” haven for yield that will continue to drive up the currency, says the chief economist at the world’s biggest reinsurer, Swiss Re.

From the AFR: So, Jacob Greber says that my joint proposal (along with Danny Price from Frontier Economics) for the Reserve Bank to adopt nominal GDP targeting instead of the inflation is a “stupid idea”.

From Banking Day: The language is uncompromising and the analysis rough for the reputation of the Australian Financial Markets Association in a claim by a trio of US investment interests centred on alleged rigging of the bank bill swap rate.

By Leith van Onselen Senator Nick Xenophon has co-written an article today arguing that the RBA should abandon its 2%-3% inflation target in favour of a 5% nominal GDP growth target.

More from Moody’s: Our outlook for the Australian banking system is negative.

From Bill Evans of Westpac today comes a big picture piece: My Weekly piece is, as expected, usually focussed on short term market and policy issues.

Sort of, from the RBA: In response to your email, and for your background, I refer you to relevant remarks contained in two recent Bank publications: August 2016 Statement on Monetary Policy – Chapter 3.

Find the full transcript of Captain Glenn’s departing interview at The Australian here.

Exclusive to MB, Tim Lawless, CoreLogic Head of Research, responds to questions about the RBA sidelining its house price results in making recent decisions on monetary policy.