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☆ Australia's surprisingly strong Q3 inflation raises odds of Nov rate hike
▼ + stars: | 2023-10-25 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

Markets are wagering both the U.S. Federal Reserve and the European Central Bank are done with hiking. HAWKISH MESSAGINGThe recent messaging from the central bank has been on the hawkish side. The biggest contributors to the third quarter inflation were fuel, rents, and electricity. Fuel prices rose 7.2% from a year ago, reversing two quarters of price falls, with the conflict in the Middle East potentially set to further stoke inflationary pressures. The central bank forecast in August that inflation was only projected to return to the top of the bank's target band of 2-3% in late 2025.

Persons: David Gray, Worryingly, Adam Boyton, Gareth Aird, Michele Bullock, Woolworths WOW.AX, Taylor Nugent, Stella Qiu, Wayne Cole, Shri Navaratnam Organizations: REUTERS, Rights, Reserve Bank of Australia, Australian Bureau, Statistics, Wednesday, Commonwealth Bank of Australia, ANZ, Economics, CBA, U.S . Federal Reserve, European Central Bank, Woolworths, National Australia Bank, NAB, Thomson Locations: Sydney, Australia

☆ RBA to hold rates at 3.85% in June, but may raise again soon: Reuters poll
▼ + stars: | 2023-06-02 | by ( Devayani Sathyan | ) www.reuters.com time to read: +3 min

REUTERS/David GrayThe Reserve Bank of Australia (RBA) raised rates last month after pausing in April, confounding financial markets and a majority of economists who were expecting the central bank to hold. The remaining eight in the poll taken between May 29 and June 1 poll expected a 25 basis point hike. Interest rate futures were pricing in a roughly one-in-three chance of a rate hike then. More than half of respondents, or 18 of 28, expected rates to reach 4.10% or higher by end-September, including four who saw rates at 4.35%. The remaining 10 expected rates to stay at 3.85%.

Persons: David Gray, Philip Lowe, “ we’ve, ”, Taylor Nugent, ” Nugent, Gareth Aird Organizations: Reserve Bank of Australia, REUTERS, David Gray The Reserve Bank of Australia, ANZ, CBA, NAB, Westpac, Economics Locations: BENGALURU, Sydney, Australia

☆ Aussie housing dip over, prices to rebound into next year on rate view
▼ + stars: | 2023-06-01 | by ( Vivek Mishra | ) www.reuters.com time to read: +3 min

Summary poll dataBENGALURU, June 1 (Reuters) - Australia's housing market outlook has improved significantly, with home prices expected to on average stagnate this year compared to the near double-digit fall predicted three months ago, according to a Reuters poll of housing analysts. They were then forecast to rise 4.5% in 2024, almost twice the expected rate from the previous poll. While ANZ and Westpac forecast no growth this year, CBA expected a 3.0% rise and NAB predicted a 4.0% decline in prices. "We are almost at the top of the RBA's hiking cycle, which means the headwind on property prices from rates ratcheting higher has largely run its course." (For other stories from the Reuters quarterly housing market polls:)Reporting by Vivek Mishra; Polling by Sujith Pai and Veronica Khongwir; Editing by Hari Kishan, Ross FinleyOur Standards: The Thomson Reuters Trust Principles.

Persons: Adelaide Timbrell, Gareth Aird, Shane Oliver, Vivek Mishra, Sujith Pai, Veronica Khongwir, Hari Kishan, Ross Finley Organizations: Bank of Australia, ANZ, Westpac, CBA, NAB, Economics, AMP, Thomson Locations: BENGALURU, New Zealand

☆ Australia's home prices rise again in sign of market bottom
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +2 min

SYDNEY, May 1 (Reuters) - Australian home prices rose for a second straight month in April, in a further signal that the nation's property market may have hit a floor ahead of a central bank rate decision on Tuesday. Figures from property consultant CoreLogic released on Monday showed prices nationally rose 0.5% in April from March, when values were up 0.6%, indicating Australian home prices may have bottomed out after slumping 9.1% from May 2022 to February. We now expect home prices to rise by 3% in 2023 and forecast a further increase of 5% in 2024." Shane Oliver, chief economist at AMP, also no longer expects a top-to-bottom fall of 15-20% in housing prices, citing "a far worse property demand and supply imbalance" with immigration levels surging and supply remaining tight. PropTrack data on Monday showed that home prices rose 0.14% in April, bringing the cumulative increase this year to 0.75%.

☆ Australia pauses rate hikes to assess tightening impact, Q1 inflation in focus
▼ + stars: | 2023-04-04 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

Wrapping up its April policy meeting, the Reserve Bank of Australia (RBA) did warn that "some further tightening of monetary policy may well be needed" to ensure that inflation returns to target. Markets had been wagering on a pause, while analysts were split on whether the bank would hike again given the still high level of inflation. Three-year bond futures were up 9 ticks to 97.14, with futures now also leaning towards a pause in May, implying hikes are essentially over. "The Board recognises that monetary policy operates with a lag and that the full effect of this substantial increase in interest rates is yet to be felt." Bill Evans, chief economist at Westpac, said there isn't sufficient evidence for the bank to change its terminal rate forecast of 3.85%, after Tuesday's pause.

☆ RBA to hike rates 25 bps on April 4 but decision on a knife edge
▼ + stars: | 2023-03-31 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +4 min

BENGALURU, March 31 (Reuters) - Australia's central bank is expected to go for a final 25 basis point interest rate hike to 3.85% on Tuesday, although forecasts from economists polled by Reuters suggest the decision on whether to hike or hold rates is on a knife edge. However, eight of the 13 economists expecting a pause pencilled in a rate hike sometime in the second quarter. Although CBA and Westpac forecast a pause in April, they expect one more rate hike in the second quarter. Minutes from the March meeting showed RBA board members reconsidered the case for a pause at the following meeting, noting monetary policy was already in restrictive territory and the economic outlook was uncertain. Although the median forecast showed the cash rate would remain at 3.85% until the end of 2023, five economists predicted it to peak at 4.10%.

☆ The Fed plans to keep hiking, but Australia is set to pause as it warns of recession risks
▼ + stars: | 2023-03-08 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

Brook Attakorn | Moment | Getty ImagesAs Federal Reserve Chair Jerome Powell hints at bigger and possibly faster rate hikes ahead, Australia's central bank could be headed toward a different path. 'Plurals are gone'Comparing the wording from the central bank's previous meeting, Commonwealth Bank of Australia economist Gareth Aird said a pause could come as early as April. "Markets should treat the April Board meeting as 'live' and the RBA could pause," he said in a note shortly after the central bank's announcement. "The reference to assessing 'when' means that the RBA Board has not yet made their mind up around increasing the cash rate in April," he said. Divergence of rhetoricThe Australian dollar hovered at the weakest levels not seen since November 2022 after the central bank's decision.

☆ Australia central bank tempers hawkish outlook after hiking rates to over decade high
▼ + stars: | 2023-03-07 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

In a dovish step, the central bank dropped a reference to further rate "increases", saying instead that "further tightening" would be needed, suggesting that just one more hike might be enough. Rates have already gone up by a whopping 350 basis points since last May, easily the most aggressive tightening campaign by the central bank in modern history. Speculation was rife that the central bank could temper the forward guidance given recent softer data with unemployment rising, economic growth disappointing and wages not climbing as fast as feared. Gareth Aird, economist at Commonwealth Bank of Australia, sees a risk of the RBA could pause in April. "The reference to assessing 'when' means that the RBA Board has not yet made their mind up around increasing the cash rate in April," Aird said.

☆ Australia c.bank signals more tightening ahead after lifting rates to decade-high
▼ + stars: | 2023-02-07 | by ( Stella Qiu | ) www.reuters.com time to read: +3 min

Three-year government bond yields jumped 15 bps to 3.254% while ten-year yields also surged 15 bps to 3.615%. HIGH INFLATION 'VERY COSTLY'Inflation is expected to decline to 4.75% this year and only slow to around 3% by mid-2025, according to the RBA's latest forecasts. There are signs that consumers are finally pulling back on spending as cost of living surges and rate increases bite. "High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people's expectations, it would be very costly to reduce later," warned Lowe as he signalled the bank's intention to extend the tightening cycle.

☆ Australia’s central bank signals more tightening ahead after hiking rates to decade high
▼ + stars: | 2023-02-07 | by ( ) edition.cnn.com time to read: +3 min

Markets were surprised by the hawkish tone of the RBA which shattered any expectations of an imminent pause to the tightening campaign. Three-year government bond yields jumped 15 bps to 3.254% while ten-year yields also surged 15 bps to 3.615%. There are signs that consumers are finally pulling back on spending as the cost of living surges and rate increases bite. “High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later,” warned Lowe as he signaled the bank’s intention to extend the tightening cycle.

☆ Australia house prices forecast to slump 16% from peak
▼ + stars: | 2022-11-25 | by ( Vivek Mishra | ) www.reuters.com time to read: +3 min

Australian house prices have nearly doubled since the financial crisis but that boom has led to a build-up of household debt that could become a risk to financial stability. Although average house prices have fallen 6.5% since a peak late last year, with losses spreading to every state capital, they are still well above pre-pandemic levels. "We expect a peak to trough housing fall of 15-20% and this should be considered an orderly descent," said Adelaide Timbrell, senior economist at ANZ. While lower house prices would help improve affordability, it would be a bitter pill to swallow for recent homeowners, watching their capital decline and facing higher repayments as interest rates rise. AMP, ANZ, Knight Frank and Macquarie said average house prices would have to fall between 25% and 45% to make Australian housing affordable.

☆ Australia jobs beat forecasts, boosting case for more rate hikes
▼ + stars: | 2022-11-17 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

Figures from the Australian Bureau of Statistics on Thursday showed net employment rose 32,200 in October from September, when they fell a revised 3,800. That came as a surprise to many analysts who had looked for a gain of only 15,000. Full-time employment jumped 47,100, bringing total job gains for the 12 months to October to a massive 762,000. That would bring the total tightening since May to 300 basis points, easily the most aggressive in modern history. Reporting by Wayne Cole; Editing by Jacqueline Wong and Ana Nicolaci da CostaOur Standards: The Thomson Reuters Trust Principles.

SYDNEY, Nov 1 (Reuters) - Australia's central bank on Tuesday stuck with a slower pace of interest rate rises for a second month while revising up its inflation outlook, saying more rate hikes would be needed as it struggles to keep the economy afloat while battling inflation. Reuters Graphics"The Reserve Bank has indicated a preference for 'normal' 25 basis point rate hikes," said Craig James, chief economist at CommSec. CLOUDY OUTLOOKThe RBA was the first central bank among developed nations to break with outsized interest rate hikes, warning that households were already under pressure with rate rises so far. The Bank of Canada slowed its pace of rate hikes, saying it was getting closer to the end of its historic tightening campaign. The European Central Bank, while hiking rates as expected, sounded a cautious note on the outlook.

☆ Australia retail sales up again in Sept as spending stays resilient
▼ + stars: | 2022-10-31 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

SYDNEY, Oct 31 (Reuters) - Australian retail sales posted another solid increase in September thanks to spending on food, clothing and eating out with consumption staying surprisingly resilient in the face of surging inflation and higher interest rates. Data from the Australian Bureau of Statistics (ABS) on Monday showed retail sales rose 0.6% in September from August to a record A$35.1 billion ($22.48 billion). Markets are wagering on a quarter-point hike to 2.85%, with a one-in-five chance of a return to 50 basis point moves given inflation surprised on the high side in the third quarter. He noted the hefty 250 basis points if tightening already delivered would have had little effect on inflation in the third quarter, or even this quarter, given inflation is a lagging indicator. ($1 = 1.5615 Australian dollars)Reporting by Wayne Cole; Editing by Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

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