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  • the bank Archives « Page 6 of 7 « Formula 1 Finance Formula 1 Finance
    the policy normalisation process Moreover the statement accompanying the change in policy suggests there has been no significant change in the Bank s thinking around Read more Back to Top Westpac Predict Home loan rates to hold for now On April 1 2010 Finance News Leave a comment that the RBA sees neutral or normal as 4 5 only 50bps from the current level Our estimate has been based on comments from RBA officials that the margin between private sector rates and the official cash rate has increased by 100bps since the GFC began Read more Back to Top AMP Bank Ltd to lower interest rates on its entry level home loan products after hiking mortgage rates earlier this month On March 22 2010 Finance News Leave a comment Bank dropped the interest rate on its basic variable home loan by 22 basis points to 6 27 per cent and cut the rate on its introductory variable mortgage by 45 basis points to 5 94 per cent The introductory variable home loan rate applies for only one Read more Back to Top RBA data still points to May home loan rate hike On March 15 2010 Finance News Leave a comment week s data releases have painted an interesting picture for the near term outlook for monetary policy We still expect the RBA to raise the cash rate by 25bp s in May but there are historical precedents to show that the Bank may be a little unnerved by Read more Back to Top CBA cuts investment loan LVRs On March 9 2010 Finance News Leave a comment cent to 80 per cent A spokesperson for CBA told The Adviser that the tighter standards which will take effect from Saturday 20 March will only affect new investment loans Owner occupied home loans will be in no way affected by these changes the spokesperson said Read more Back to Top The Reserve Bank has signalled more home loan interest rate rises are on the way after it yesterday lifted the cash rate to 4 per cent On March 3 2010 Finance News Leave a comment board judges that with growth likely to be close to trend and inflation close to target over the coming year it is appropriate for interest rates to be closer to average he said in a statement Today s decision is a further step in that process The Read more Back to Top Westpac Predict RBA to Raise Home Loan Interest Rates by 25bps On March 1 2010 Finance News Leave a comment market expectations put the probability of a move at about 50 We believe that most meetings in 2010 will be live in that there will be a genuine possibility of policy change and at least for the next few months a 50 50 prospect is entirely reasonable Arguments Read more Back to Top Liberty increases Commercial Loan LVR limits On February 24 2010 Finance News Leave a comment the new commercial LVR limits will

    Original URL path: http://www.formula1finance.com.au/tag/the-bank/page/6/ (2014-01-05)
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  • Expect home loan rate hike in August « Formula 1 Finance Formula 1 Finance
    point in the cycle for underlying inflation However note that the Governor has forecast that underlying inflation will track in the upper half of the target zone over the next year The low point being at the actual top of the zone hardly qualifies for that description Recall that the Bank assesses that currently interest rates are around neutral If the Bank is setting policy with inflation in mind then it will have little choice but to nudge rates into the contractionary zone The Bank would have much more flexibility if it has substantially revised down its growth forecasts to reflect a much weaker outlook for the world economy Westpac s growth forecasts for 2011 and 2012 are significantly lower than the forecasts we saw from the Bank in its latest Statement on Monetary Policy see above We expect growth in 2011 and 2012 around trend pace of 3 2 If the Bank were to lower its forecasts to those levels then it might assess that it has flexibility to stare down this high CPI Unfortunately we will not see these forecasts until August 6 3 days after the Board meeting in August The Governor s Statement gave us little guidance in that regard but there may be more information in the Board minutes which are released July 20 the same day that the Governor addresses the Australian Business Economists in Sydney Despite 10 of the last 12 prints of the trimmed mean being 0 8 qtr or higher we are still surprised that our trimmed mean estimate is so high It is not because we have forecast excessive numbers for the major items in the CPI house purchase 8 weight rents 5 8 motor vehicles 4 2 and deposit and loan facilities 4 The trimmed mean is calculated after cutting off the lowest 15 and highest 15 by weighting of price changes of the 90 components of the CPI Our calculations expect that the top 15 will be covered by only 4 large items including tobacco 2 5 weight That keeps a lot of items with increases of 2 or more within the 70 group On the downside we do not expect more than 20 items to register price falls Only 3 of these items spill over into the 70 group which is used to calculate the trimmed mean In previous quarters the trimmed mean has tended to include considerably more negative items A full analysis of our calculations will be released in our normal detailed Preview Bulletin on July 15 Of course there are the normal major uncertainties with these calculations particularly surrounding the notoriously volatile deposit and loan facilities A sensitivity analysis on this variable highlights the possibility that the trimmed mean could print only 0 8 qtr It is possible but unlikely that this highly unreliable component of the CPI could result in an even lower reading Our forecast for headline quarterly CPI is also 0 9 qtr That would push the annual rate to 3

    Original URL path: http://www.formula1finance.com.au/finance-news/expect-home-loan-rate-hike-in-august/ (2014-01-05)
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  • Home Loan Rates may rise in August: economists « Formula 1 Finance Formula 1 Finance
    annual 3 05 per cent in the March quarter The RBA noted underlying inflation was likely to remain in the upper half of the bank s target of two to three per cent over the next year The rate of CPI consumer price index increase is likely to be a little above three per cent in the near term due to the effects of increases in tobacco taxes announced earlier in the year and significant increases in prices for utilities the RBA said RBC Capital Markets senior economist Su Lin Ong forecast underlying inflation to print at 0 8 per cent in the June quarter for an annual rate just above three per cent This may be enough to push the RBA over the line at the August board meeting but this would also demand some stability in global markets and data Ms Ong said The hurdle to hike has clearly risen given the global uncertainty and the risk remains that this current pause may turn into one that is more protracted Citigroup managing director of investment and research analysis Paul Brennan said the board noted the risks from offshore but also acknowledged the strength in the local economy They continue to highlight the high commodity prices with the terms of trade Mr Brennan said They have not changed their forecast for growth They have slightly nudged up their inflation forecast but they don t see that as a trigger to raise interest rates Australian s trade balance was a surplus of 1 645 billion in May its second monthly surplus in a row ABS data showed on Tuesday Mr Brennan forecast the RBA to lift the cash rate to 4 75 per cent in the final quarter ICAP senior economist Adam Carr said recent pricing on debt futures markets

    Original URL path: http://www.formula1finance.com.au/finance-news/home-loan-rates-may-rise-in-august-economists/ (2014-01-05)
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  • RBA to hold on home loan interest rates « Formula 1 Finance Formula 1 Finance
    to be comfortably above trend should have a clear tightening bias If the Bank is revising down its growth rate forecast for next year back from 3 75 to say 3 then with a growth forecast slightly below trend there would be no pressing need to move rates away from neutral Inflation trends will also be important for policy If for instance the Bank finds that with the release of the June quarter CPI on July 28 underlying inflation is printing at 0 8 qtr then it will be telling the Bank a disturbing story about inflation trends The low point of inflation in the cycle is printing 3 2 6 month annualised an unacceptable position for a Bank seeking to hold inflation within the 2 3 range on average through the cycle However if it was to significantly revise down its growth forecasts for 2010 and 2011 it could reasonably argue that 2010 was not the low point in the inflation cycle and could buy some time For all these reasons we will be closely watching the Governor s Statement to assess whether the Bank is lowering its growth profile One area where we think the Bank will not be disturbed by current global events is China Like ourselves we think the RBA would see the current loss of momentum in some Chinese lead indicators as being consistent with growth moving back from an unsustainable 12 to a sustainable 9 The Bank may be inclined to raise its forecast for mining investment following the announcement of the revised mining tax With more attractive depreciation allowances and maintaining some of the positive from the miners perspective aspects of the RSPT we see this development as unambiguously positive for growth Source Bill Evans Westpac Chief Economist Brett Colley 365 Posts Brett

    Original URL path: http://www.formula1finance.com.au/finance-news/rba-to-hold-on-home-loan-interest-rates/ (2014-01-05)
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  • RBA maintains neutral stance « Formula 1 Finance Formula 1 Finance
    which had GDP growth accelerating to 3 75 over the year to June 2011 That said the RBA s inflation forecasts which is for inflation to be in the upper half of the target zone over 2010 11 still leaves little room for upside surprise Having outlined a neutral bias the RBA now has sufficient flexibility should global conditions worsen or domestic conditions strengthen We continue to believe the next move in interest rates will be up not down Our forecast is for two further interest rate rises of 25bp a piece in Q3 and Q4 this year This is predicated on the view that global growth stays around trend this year and that Australian contract commodity prices continue to rise albeit at slower rates over 2010 11 fuelling domestic inflationary pressures in our capacity constrained economy But while the Statement suggests the current setting of monetary policy is appropriate for the near term this does not mean they the RBA will be in a rush to move in either direction any time soon Indeed the risk to our view is that we may well now see the RBA stay on the sidelines for an extended period The risks from both the European debt crisis and government attempts to slow an overheating Chinese economy will not be resolved quickly Such an environment particularly the troubles in Europe could not only push down commodity prices but could also further pressure wholesale borrowing rates in Australia limiting the need for further policy tightening even should near term inflation outcomes print above expectations These risks could keep the RBA on hold well into year end Source Katie Dean ANZ Economics and Markets Research Brett Colley 365 Posts Brett has been involved in management in the finance industry for over 13 years Brett s

    Original URL path: http://www.formula1finance.com.au/finance-news/rba-maintains-neutral-stance/ (2014-01-05)
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  • Economists warn that more pain is on the way « Formula 1 Finance Formula 1 Finance
    board has been adjusting the cash rate towards levels consistent with rates to borrowers close to average it said The board expects that as a result of today s decision rates for most borrowers will be around average levels The Macquarie rates strategist Rory Robertson said the bank was declaring phase one of momentary tightening over but he said phase two could start within months I think the bank will pause at least one meeting but as early as July it may have marshalled the arguments as to why policy doesn t need be just neutral it needs to be restrictive There is a clear and growing bias for rates to go substantially higher Kevin Grice an economist at Capital Economics in London agreed saying Australia was likely to be the first of the world s major economies to move beyond neutral The political danger for the government is that the Reserve Bank s words will no longer allow it to claim that any future rate rises are part of the process of returning to normal Mr Swan said his no frills budget on Tuesday would take pressure off the economy by attending to capacity constraints Economic stimulus was already being withdrawn But the shadow treasurer Joe Hockey called on him to do more saying he could take pressure off house prices by making available more land Most governments in Australia are Labor governments they control the supply of land I would say ring up your mates in the states end the blame game and get more supply of land Mr Swan said the housing market had long term problems made worse by the impact of the global recession SOURCE Peter Martin Sydney Morning Herald Brett Colley 365 Posts Brett has been involved in management in the finance industry for

    Original URL path: http://www.formula1finance.com.au/finance-news/economists-warn-that-more-pain-is-on-the-way/ (2014-01-05)
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  • RBA Governor's testimony: confirms home loan rates to rise, timing uncertain « Formula 1 Finance Formula 1 Finance
    did the RBA pause in February The RBA emphasised that one of the benefits of beginning the tightening cycle early is to have the luxury to assess the impact of initial moves The RBA did just that in February deciding they wanted to assess the impact of the first three moves and of the additional adjustment by commercial banks The Governor also noted that the RBA s interpretation of some domestic data released early this year differed from that of the markets Unfortunately the Governor did not elaborate or identify the data in question 3 Greece debt issue The RBA Governor was balanced on the Greece issue He saw the potential for turmoil to impact global growth When pressed he saw Greece s debt problems at the margin as a consideration for leaving interest rates on hold at the February meeting domestic factors were central The RBA does not expect these issues to directly impact upon Australia s sovereign debt position Australia s position is far more favourable While the comments were balanced we re mindful that RBA thinking could shift prior to the March meeting if events unfold quickly 4 Regulatory changes for the financial system The RBA recognises that regulatory changes pose a medium term constraint to Australia s growth Requirements will be for higher liquidity thereby imposing higher funding costs and implying that credit will be less freely available The Governor stressed that regulatory changes aim to enhance the resilience of the financial system to the next crisis but must not impair our ability to recover from this one He was confident that an adequate solution from an Australian perspective will be found 5 Inflation target There was strong opposition to relaxing the inflation target to 4 as suggested in a recent IMF paper The RBA argued that Australia s flexible inflation target approach was a success enabling the RBA to respond to emerging imbalances The 2003 period when the housing market became overheated was cited 6 Housing bubble In assessing the existence of a housing bubble the Bank considers the pace of credit growth and lending standards as well as prices This framework suggests that a bubble does not exist at present Housing credit growth was described as healthy but not rapid While lending standards are not falling but rising A concern may arise if prices were to continue rising at the current pace However there is already evidence that prices have recently levelled out at the bottom end of the market in the wake of higher interest rates and a winding back of first home buyer grants At the top end price rises represent a bounce back after a significant reaction to the downturn More generally in terms of asset bubbles it is the degree of leverage that is the critical concern 7 Labour market strength The RBA believes that the unemployment rate is unlikely to fall much in the next half year Rather they expect average hours worked to rise We would note however

    Original URL path: http://www.formula1finance.com.au/finance-news/rba-governors-testimony-confirms-home-loan-rates-to-rise-timing-uncertain/ (2014-01-05)
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  • Home loan credit rules set to tighten « Formula 1 Finance Formula 1 Finance
    card applications and loans to large companies and the corporate sector had been tightened somewhat Credit demand during that time increased somewhat for consumers overall and home loan borrowers while demand for business loans and all other loan categories either held steady or declined Demand from large corporates and property companies dropped the most For corporates the loan terms that changed the most during the second half of 2009 was pricing which tightened considerably followed by collateral requirements and then non interest fees and maturity dates For home borrowers loan pricing tightened somewhat followed by non interest fees and collateral requirements Home loan maturities remained unchanged Banks rising funding costs was cited as the top reason for tightening lending standards for both corporates and home borrowers followed by the general economic environment But competition from other banks also proved a strong driver Tougher proposed regulatory capital requirements unemployment and the prospects for the housing market had no impact on decisions to tighten borrowing standards bankers said Bankers expect credit across Australia to grow at between five and 10 per cent in calendar 2010 while UBS forecasts two per cent growth Credit demand by all borrowers is expected to hold steady for the next six months Bank margins will fatten by up to 10 basis points the bankers said SOURCE Alison Bell Business Day Brett Colley 365 Posts Brett has been involved in management in the finance industry for over 13 years Brett s diverse experience in finance real estate developments and all facets of the construction industry confirms Formula 1 Finance to be an innovative professional finance broking firm On February 15 2010 Finance News Leave a comment Leave a Reply Click here to cancel reply You must be logged in to post a comment Finance News RBA rate announcement

    Original URL path: http://www.formula1finance.com.au/finance-news/home-loan-credit-rules-set-to-tighten/ (2014-01-05)
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