Australian interest rates

We’ve seen suicide bombings by Ian Harper, Phil Lowe, Christopher Kent, Michelle Bullock, Luci Ellis and today it is Guy Debelle: Thank you very much to AmCham for giving me the opportunity to speak in my home town of Adelaide.

Via The Australian: O’Sullivan’s commission could do irreparable damage to the financial system.

On Tuesday we noted a significant change in the Statement by the Reserve Bank Governor: “Our research showed that there has been a very significant change in the Governor’s Statement for this month.

We warned BofAML in January that it was wrong: We continue to expect the RBA to remain on hold this year but concede the case for hikes in 2020 has weakened.

Via UBS: Implications: smaller than expected stimulus raises risk of early/more RBA cuts Overall, as we flagged, the Budget improved modestly due to higher commodities & fiscal conservatism, with the surplus profile supporting the AAA.

Via Bill Evans at Westpac: As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.50%.

It would save the Budget $1m a year to keep the cash rate at neutral forever without all of the fuss: Markets have stopped believing Dr Lowe anyway with the AUD selling hard when he held his neutral position: And bond markets bidding aggressively: The brick is cheap and incorruptible.

The Reserve Bank of Australia is out with its latest policy decision and the word is At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

Via the excellent Damien Boey at Credit Suisse: US Treasuries sold off aggressively overnight on upside surprises in manufacturing PMI readings for the US and China.

This is so bad I don’t know where to look, from HSBC’s Bloxo: It is clear that the bar for the RBA cutting its cash rate is very high.

Via Westpac: Tuesday’s RBA Board meeting has taken on extra importance given the surprise RBNZ decision to switch to an easing bias.

It’s like herding cats!

Straight from the horse’s mouth, via Chanticleer: …up in Hong Kong, as least one of the Big Four was making it very clear that full pass-through was unlikely; the bank was keen that investors particularly understood that deposit rates at zero gave it very little room to move.

Says ANZ: We expect no change to RBA policy as the labour market remains strong.

APRA’s monthly banking statistics have nothing but bad news for house price.

Via UBS’s excellent George Theranou: Households are still leveraging.

Via Bill Evans at Westpac: In previous years the Reserve Bank has generally observed that fiscal policy has had only a very limited bearing on monetary policy decisions.

It led on macroprudential. It led on keeping all levers of monetary policy under one roof. It led on bank capital. And now it is leading on the basic arithmetic of doing your job. Voila, the RBNZ! The Official Cash Rate (OCR) remains at 1.75 percent.

Via BS today comes the economics community cracking the code for where the Sun don’t shine: Australia’s economy slowed sharply in the second half of last year yet hiring, from a broad perspective, did not.

Magazine cover alert?

Given they are the untouchable sacred cow of modern finance, how do you fix an “independent” central bank when it goes rogue?

Via the excellent Damien Boey at Credit Suisse: What a difference a few weeks make!

Sigh.