Australian interest rates

From Cameron Kusher at CoreLogic: Over the past few weeks three of the four major banks in Australia have announced that they are going to be increasing variable mortgage rates.

Via Damien Boey at Credit Suisse: Another two bite the bullet ANZ and CBA are the latest of the major banks to hike mortgage rates out-of-cycle.

As widely expected, the RBA has left the cash rate on hold.

From The Shadow: Outcome: September 2018 Leadership Change Does Not Alter Shadow Board’s Interest Rate Recommendation The recent leadership change in the Australian government has not altered the Shadow Board’s recommendation for interest rate policy.

Via Damien Boey at Credit Suisse: Out-of-cycle rate hikes continue Late Friday afternoon, Adelaide Bank (BEN) and Suncorp (SUN) raised mortgage rates out-of-cycle: 1.

Australian banks don’t seem concerned that the bedrock of their liabilities is developing a fatal crack, via The Australian: Savers are being slugged by ultra-low deposit rates as the nation’s banks work hard on both sides of the balance sheet to prop up their flagging interest margins, while borrowers suffer out-of-cycle rate rises.

What happened to the so-called “Bondcano”, the notion that Aussie bond yields were going to explode, laying waste to every thing their path.

Via Courier Mail: SUNCORP is lifting home loan rates for the second time this year, following on moves from big rival Westpac earlier this week.

Via the AFR: Adelaide Bank is increasing rates for eight products covering its range of principal and interest and interest-only owner-occupied and investor products.

Via the excellent Damien Boey at Credit Suisse: Out of cycle rate hikes continue WBC was the latest of the banks to hike variable rates across new and existing customers, following similar moves from BOQ, BEN, MQG and SUN over the past few months.

Via Moody’s: Summary Australian mortgage delinquencies will increase over the next two years as a record number of interest-only (IO) mortgages convert to principal and interest (P&I) loans, a credit negative for residential mortgage-backed securities (RMBS).

Via the Kouk: Three downside risks to the AUD A certain calm in currency markets, including for the Australian dollar, was briefly punctured in early August when the Turkish lira collapse spread to other emerging markets and sparked a jump in the US dollar.

More great work from Damien Boey at Credit Suisse: Inflation is peaking, not troughing We have just published our outlook piece for growth and inflation.

Via the AFR: New federal Treasurer Josh Frydenberg has demanded Westpac justify its out-of-cycle interest rate increase for all mortgage borrowers.

Via ABC: Westpac will increase its variable mortgage rates to counter rising funding costs that are threatening the bank’s profit margins.

Via Goldman: We have generally revised our path for yields lower on two grounds: First, we tweak our forecasts to reflect changes to local policy expectations and inflation trajectories.

Via guy Debelle at the RBA: The inflation rate is currently just over 2 per cent (Graph 1).

Via Bill Evans: Westpac has extended its financial forecasts to end 2020.

From Phil Lowe just now: I am very pleased to be here to participate in the launch of the National Financial Capability Strategy.

Via Bill Evans of Westpac: Last week the Reserve Bank surprised by lowering its inflation forecasts for 2018 (both underlying and headline).

It is amusing watching Australia’s worst economic forecaster, the Reserve Bank, struggle desperately to bend reality to its will.