Australian interest rates

Fresh from the Loon: International Economic Conditions Members commenced their discussion of the global economy by noting that business conditions in the manufacturing sectors in many economies had remained subdued.

Alan Kohler climbs aboard the monetary helicopter today: QE involves printing money and buying government bonds from banks to give them cash.

The corrupt Wayne Byers and his disgraced APRA have undertaken a new round of arse covering, from a speech Friday: APRA recently issued its four-year Corporate Plan for 2019-2023.

Via Damien Boey at Credit Suisse: Overnight, ECB President Draghi launched his “bazooka” stimulus option – but markets experienced some highly counter-intuitive moves.

Via the excellent Damien Boey at Credit Suisse: With bond yields rising sharply, the Australian yield curve (10-year bond yield minus cash rate) is no longer inverted.

Via Banking Day legend Ian Rogers: Hidden industry self-assessments must be published pronto and APRA must lean hard on banks to ensure that they are, scrutineer Graeme Samuel told a parliamentary hearing yesterday.

Via Martin North: APRA released their quarterly property exposures data to Jun 2019 today.

NAB now calling for three rate cuts over the next nine months: “Post the national accounts – not surprisingly – we have not materially changed our forecasts.

Via Damien Boey at Credit Suisse: Overnight, US 10-year bond yields surged by another 9bps.

The bond bloodbath we’ve seen in the past week continued last night: The curve has steepened materially: And spreads to the US have narrowed: The question is: is it a turn or counter trend rally?

More pressure today for Australia’s most corrupt regulator, Wayne Byers and his disastrous APRA, via Domain: Banking regulators may have to tighten lending standards sooner than expected amid fresh signs the Reserve Bank of Australia’s back-to-back interest rate cuts have enticed investors back into the property market.

Nice work from the AFR today: Australian Prudential Regulation Authority chairman Wayne Byres and insurance expert Geoff Summerhayes spent over $100,000 on 11 business trips in the first six months of this year, at the same time as staff complained about the agency’s “shoe-string budget”.

A new distraction is upon Australian macro management.

Via the excellent Damien Boey at Credit Suisse: Confusing growth outlook Investors are becoming more concerned about slowing growth.

Via the AFR: Economist Richard Holden from the University of NSW said it was a “good idea” for the government to press the RBA to thoroughly explain why it had undershot its 2-3 per cent inflation target because the bank had been “too slow” to cut interest rates in June and July.

Via the ANZ late yesterday comes a forecast for three rate cuts before May next year: We now expects the cash rate to fall another 75bps to 0.25% by mid-2020 as the growth slowdown flows through to the labour market and the RBA responds.

Via Bill Evans at Westpac: As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.0% at today’s meeting.

The RBA decision is out and it’s a hold as expected: At its meeting today, the Board decided to leave the cash rate unchanged at 1.00 per cent.

It’s raining poor data now.

The unsackable chairman of Australia’s single most important regulator has done it again.

Via Bill Evans at Westpac: The Reserve Bank Board meets next week on September 3.

It’s horrible to watch as APRA’s head zombie regulator, Wayne Byers, shuffles along after a revving house price Ferrari.

Via Capital Economics: The experience from other central banks that have launched QE is that they only did so when the economy was in recession, inflation was negative or the unemployment rate well above its long-term average.