Money: Reserve Bank signals further rate cuts are imminent - - PressFrom - Australia
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MoneyReserve Bank signals further rate cuts are imminent

07:30  19 june  2019
07:30  19 june  2019 Source:   smh.com.au

Aust eyes jobs data after long weekend

Aust eyes jobs data after long weekend During a shortened trading week, Australian financial markets are expected to focus on the latest employment data. Australian financial markets are waiting to see if a purported jump in confidence on the back of the federal coalition's election win is reflected in key jobs, consumer and business data due this week. How To Get A Home Loan With 5% Deposit Find out more on Finder Ad Finder.com.au The local market restarts trading on Tuesday after the Queen's Birthday public holiday long weekend and after the resumption of US markets overnight on Monday.

The Reserve Bank has signalled further rate cuts are imminent as it looks to jolt the economy out of a stupor and drive down unemployment. The minutes of the June board meeting released on Tuesday show the RBA decided to cut rates to a record low of 1.25 per cent after persistently weak

The bank announced that it would further shore up local banks by purchasing their domestic bonds. It is down 35 percent so far in October and worth half what it was at the end of 2007. Like Japan, South Korea is heavily dependent on exports, and fears that consumers in export markets like the United

Reserve Bank signals further rate cuts are imminent© Attila Csaszar Reserve Bank governor Philip Lowe.

The Reserve Bank has signalled further rate cuts are imminent as it looks to jolt the economy out of a stupor and drive down unemployment.

Delivering one of its most sombre assessments in years, the RBA said employment was unlikely to grow faster than population growth - meaning wages are unlikely to rise without further stimulus and the jobless rate will remain steady rather than fall.

The minutes of the June board meeting released on Tuesday show the RBA decided to cut rates to a record low of 1.25 per cent after persistently weak inflation data and the low rate of wages growth provided further evidence of a slowing economy.

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Money markets are pricing in about an 80% chance of a cut at the Reserve Bank ’s Oct. 1 meeting. That has echoes of the title of his Brisbane address in May -- ‘The Economic Outlook and Monetary Policy’ -- when the governor signaled further interest- rate cuts were imminent .

As of Friday, interbank cash rate futures imply an 83 percent chance Glenn Stevens and the board will slice a further 25bps For some, this is as clear as any signal to suggest a rate cut is imminent RBA FX reserves and trade balance data will wrap up a big week of economic feedback on Friday.

"Given the amount of spare capacity in the labour market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead," the minutes said.

The central bank has shifted its focus from the 2 to 3 per cent inflation target towards getting the unemployment rate down to 4.5 per cent in the hope of stimulating wages growth and sluggish household consumption. It conceded the current economic indicators made that unlikely.

"Forward-looking indicators of labour demand pointed to a moderation in employment growth in the near term, to around the rate of growth in the working-age population," the minutes said.

"In assessing whether further monetary easing was appropriate, developments in the labour market would be particularly important."

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The Bank of Thailand left its benchmark interest rate unchanged and signaled that an expected cycle of lower rates might not begin right away, rejecting calls The central bank left its 14-day repurchase market target rate unchanged at 5%, as expected, and formally adopted a plan to use the one-day

Days after the Federal Reserve lowered borrowing costs for a second time since July, a top Fed official signaled Friday that further interest rate cuts could come before year-end. Vice Chairman Richard Clarida

It urged the government to do more as it runs out of wriggle room to cut interest rates further if economic circumstances do not improve.

"The [board] also recognised, however, that lower interest rates were not the only policy option available to assist in lowering the rate of unemployment, consistent with the medium-term inflation target," the minutes said.

The board said tax cuts that have yet to be passed by Parliament, worth $1080 for most workers and scheduled to begin in July, would boost household disposable income and could support household consumption in the second half of 2019.

House price figures from the Australian Bureau of Statistics released on Tuesday also highlighted the economic headwinds facing the country.

The bureau said house prices fell in every capital city with the biggest falls in Sydney (3.9 per cent) and Melbourne (3.8 per cent) through the March quarter.

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Russia's central bank cut its main lending rate on Friday for the first time in almost a year, signaling confidence that inflation risks are declining and describing But this factor appeared to be outweighed by the positive signals the central bank had sent about the health of Russia’s economy more generally.

The Commonwealth Bank jumped on signals from the central bank on Tuesday that more interest rate cuts are imminent , forecasting rates will hit a record low of 0.75 per cent before Christmas. RBA governor Philip Lowe: the bank says employment is unlikely to grow faster than population growth.

Over the past year, prices in Sydney have fallen by 10.3 per cent while in Melbourne they are down by 9.4 per cent.

Hobart (up by 4.6 per cent) is the only capital where prices have lifted by more than the inflation rate over the past 12 months.

The bureau noted the fall in prices is hitting the overall value of the nation's housing stock. The value of all housing fell by $173 billion in the quarter, the single largest drop in value for figures that go back to 2011.

Houses in NSW shed $96 billion in value while in Victoria they lost $61 billion.

Over the past year, $393 billion has been wiped from the value of the nation's housing stock. It is now below $6.6 trillion, in line with where it was in December 2016.

The head of the bank's financial stability department, Jonathan Kearns, used an address to a property summit in Canberra on Tuesday morning to release data showing the number of people in arrears on their home loans had now reached the level recorded during the global financial crisis.

Mr Kearns said although the proportion of people behind was still low at just on 1 per cent of all loans, the growth in mortgages in arrears was evidence of broader issues facing the economy.

CBA, NAB to cut savings interest rates

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MUMBAI: Industry may be clamouring for rate cuts and Finance Minister Arun Jaitley may have pointed to the cost of capital as one of the culprits responsible for low growth in manufacturing but the Reserve Bank ’s latest Financial Stability Report indicates that interest rate cuts might not be imminent .

New Delhi ministers and economists alike are hoping for further monetary easing from the Reserve Bank of India (RBI) but in an exclusive interview with CNBC, central bank governor Raghuram Rajan hinted that any imminent rate cuts were unlikely. A decline in food prices—long a thorn in the side of

He said while arrears rates were not at a level that posed a "risk to financial stability" or would cause "great harm" to households, they were worth watching closely as they were likely to increase.

"Several factors have been interacting to drive the rise in housing arrears. Economic conditions are undoubtedly part of the story," he said.

"Weak income growth, housing price falls and rising unemployment in some areas have all contributed. But they have not acted alone, interacting with earlier weaker lending standards, and the more recent tightening in lending standards."

The RBA said the housing market was likely to pick up after the election. Labor had proposed billions of dollars in changes to negative gearing and capital gains tax.

"Members noted that the housing market was likely to be affected by the removal of uncertainty around possible changes to taxation arrangements relating to housing," the minutes said.

Internationally, the board remained concerned about ongoing trade disputes between the US and China which had racheted up to a 25 per cent tariff on $US260 billion of imports between both countries.

"The US–China trade dispute had escalated in May, intensifying the downside risk posed to the global economic outlook from this source," the board said.

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Aussie firms as Fed talks sap greenback.
The US dollar has been undermined by aggressive wagers on rate cuts from the Federal Reserve, with the Australian dollar subsequently edging higher.

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