Australian interest rates

Here comes the oil tanker: Australia’s growth rate still stands at 0.9 percent for the June quarter while CPI inflation remains at 2.1%, inside the Reserve Bank of Australia’s official target band of 2-3%.

WBC has just delivered the worst of the three bank results. Headline numbers met expectations (after Friday’s second profit warning!): But under the hood there is pressure all over.

Via Bill Evans of Westpac today: The Reserve Bank Board meets next week on November 6.

Former APRA, Treasury and ASIC insider, Dr Wilson Sy, exposes everything that is wrong with the constitution of the corrupt regulator.

This is amusing stuff, at the AFR: The decision by NAB chief executive Andrew Thorburn to stop chasing new business with aggressive discounts and to reward loyal customers has put the bank in uncharted territory after delivering a result that revealed further deterioration in its net interest margin.

In one way, conventional thinkers will castigate the question.

Check out its response to the Hayne Royal Commission yesterday: 1.

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the September quarter 0f 2018, which registered both soft headline and underlying inflation.

The evidence is in.

Patrick Commins at Domainfax has gone stiff and proper today: I have to say that the purpose of this week’s house value statistic was to get your attention, and little else.

If it didn’t matter, the contortions that Australia’s corrupt financial regulators are going through would be hilarious.

Great work from Bill Evans at Westpac to round out a pretty bizarre week: We have recently read with interest a number of pieces from FOMC officials including Chairman Powell and Governor Brainard around the concept of neutral rates.

Better work from Chris Joye this week on bonds as he abandons the worst of his arguments about the benefits of floating rates.

And good on it, at Domainfax: Australian Securities and Investments Commission boss James Shipton has called for a radical increase in the regulator’s funding and slammed delays to legislation that will dramatically increase penalties against business crooks.

Via the Kouk today: How’s this for an economic plan?

Here’s what Deputy Governor Guy Debelle said about weak wages this week: As we have stated many times, we expect that will lead to a gradual increase in wages growth and, in turn, inflation.

Via Damien Boey at Credit Suisse today: Mixed September labour market report The September labour market report was mixed.

And people wonder why I call the RBA corrupt, via Domainfax: …the Reserve Bank’s deputy governor Guy Debelle said workers reluctance to take a risk and go after a better paying job was also playing a role.

Last week Harry Triguboff brushed aside concerns about a potential slump in house prices because of Australia’s mass immigration program, while also demanding policies to stimulate the market: ‘The way Australians have always made money is on property.

From Deputy Governor of the RBA Guy Debelle: Over the past year, there have been welcome developments in the Australian labour market.

Yawn: International Economic Conditions Members commenced their discussion of the global economy by noting that GDP growth in many of Australia’s trading partners had continued at an above-trend pace in the first half of 2018.

Via Westpac: Though credit spreads in the US are off their lows, they have remained relatively impervious to the heightening global risks surrounding trade and geopolitics.

Via Chris Joye today: Supposedly smart investors argue there is a long-term negative correlation between fixed-rate bonds and equities that means you should allocate to the former to protect against losses in the latter.

Paul Bloxham, Chief Australia and new Zealand Economist at HSBC via Business Insider: “The floating AUD has long been Australia’s most powerful economic shock absorber, and it deserves a lot of the credit for the long boom,” Bloxham says.