Posts tagged 'Reserve Bank of Australia'

Asian currency wars, exporting deflation and the house price bind

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| May 09 12:08 | Comment |

Bank of Korea has done its bit to stoke the currency wars…

Although they insist that it’s not. From BAML’s Jaewoo Lee:

In the press interview, the Governor cited a few main changes since April which led the BoK to cut in May rather than in April: the supplementary budget was finalized; many central banks, including the ECB, turned to easing mode; and the easing can help further with improving sentiments. The Governor, on the other hand, stated that today’s decision was not a response to the yen weakness, contrary to the often-voiced speculation.

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Lessons in monetary policy – Use it or Lose it

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| May 07 08:41 | Comment |

Surprise!

Economists mostly failed to predict that the Reserve Bank of Australia would cut rates to a record low of 2.75 per cent at its monthly meeting today. Yep, lower than during the height of the financial crisis — another sign that we’re living in different times now. Read more

A weakness in the unstoppable AUD?

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Apr 16 11:02 | Comment |

Australia’s currency has become a different kind of creature in the past few years, moving from being mostly a commodity play to more of a safe haven. This has been something of a double-edged sword for the country’s monetary policymakers: it helped avoid a big inflationary spike as the mining investment boom was booming; but now that wave is close to peaking, the burdens of having a premium currency are becoming harder to bear. Read more

In Memoriam – Australia’s inverted yield curve

| Mar 19 08:46 | Comment |

Remember Australia’s inverted yield curve in 2012?

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All you ever wanted to know about the AUD and who’s holding it*

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Feb 28 11:10 | Comment |

Strong currencies are the bane of every triple-A rated, QE-less economy in currency war-torn 2013, it seems. It’s become an increasingly irksome point in Australia, where the initial exuberance over cheap foreign holidays has been slowly replaced by worries that it’s squeezing the non-mining sectors.

An FOI request by Bloomberg yielded a bunch of documents from the Reserve Bank of Australia about the currency’s overvaluation problem. Specifically, how bad it is and who’s to blame. Well, who among other central banks*, at least. Here’s list of the definitely-implicated: Read more

When waning Aussie bond enthusiasm is not enough

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Dec 04 2012 12:12 | Comment |

The Reserve Bank of Australia cut its cash rate on Tuesday to 3 per cent — making a total of 175bps worth of cuts since November 2011, and bringing the rate to its lowest level since the depths of the financial crisis.

The RBA’s governor’s statement alluded to the bank’s discomfort over the stubbornly high Australian dollar, which is not doing what it tended to do in the past and falling to provide a fillip to the economy: Read more

The definitive guide to the RBA’s ‘passive intervention’ in the AUD

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Nov 20 2012 23:05 | Comment |

A lot of ink has been spilled by various FX strategists over what the Reserve Bank of Australia is or isn’t doing with its FX transactions and whether this is or is not tantamount to printing money. The RBA isn’t ‘printing money’ but it is doing something… or rather, not doing something, as a way of signalling that it doesn’t like the Australian dollar being so strong. They’ve been given the opportunity to do this by a foreign central bank, but that’s neither here nor there. Read on for all the messy details…  Read more

Stevens and the RBA hold the line

| Nov 06 2012 11:50 | Comment |

So Glenn Stevens likes the nags after all.

Well, sort of.

For the first time since he took the helm of the RBA in 2006, the governor did not tinker with interest rates on Melbourne Cup day (a public holiday across parts of the country). Read more

The RBA – leaning against the wind

| Oct 29 2012 01:06 | Comment |

Is the Reserve Bank of Australia intervening in the market to hold down the remarkably resilient Aussie dollar? That’s the question commentators and economists are asking themselves following the publication of data at the end of last week that showed a significant increase in the pace of foreign exchange accumulation (admittedly from a low very low base) in August and September. Read more

RBA, on further inspection, finds glass half empty

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Oct 02 2012 09:02 | Comment |

Australia’s central bank cut its overnight cash rate by 25 bps today, to 3.25 per cent — close to the crisis-level low of 3 per cent.

It’s interesting for several reasons, one of which is that many strategists didn’t see it coming. Read more

What goes up…

| Sep 03 2012 10:28 | Comment |

… must come down.

What might the following index looked without the threat of war with Iran and/or the continued existence of the gold bug brigade? Read more

Is Australia… in the same boat as Europe?

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Aug 28 2012 11:18 | Comment |

That the Australian economy may be in trouble will not be news to FT Alphaville readers.

We’ve been warning for a good while that the country is uniquely exposed to the commodity super-cycle, an overvalued currency, a real-estate bubble, not to mention the Chinese slowdown. Read more

Australia’s capex cliff

| Aug 22 2012 05:26 | Comment |

Here’s a bold call: the developed world’s fastest growing (that’s Australia for those of you at the back of the class) will fall in to recession next year as the China-driven mining investment boom ends.

Given the recent declines in Chinese steel prices and spot iron ore price, Deutsche Bank economist Adam Boyton reckons Australia’s terms of trade (the price of exportable goods divided by price of importable goods) could be 15 per cent lower year-on-year by the fourth quarter. Read more

The Aussie dollar – from South Pacific peso to Southern franc

| Aug 07 2012 10:11 | Comment |

It can’t be much fun being an Australian in London at the moment. (Trailing the Brits is one thing, but lagging the Kiwis in the medal table must really hurt.)

But at least our antipodean visitors can afford to indulge in a little retail therapy at Westfield Stratford City (the Australian dollar is trading close to a record high against the British pound) or, if they are really embarrassed, hop on the Eurostar to Paris (where the dollar hit a record high against the eurothingy just last week). Read more

Four trends in central bank-land

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Apr 17 2012 11:13 | Comment |

1. The central bank bashing doesn’t start and end with Bernanke.

Central banks just about everywhere make fantastic political punching bags, and the popularity of this tactic is growing. For example: 
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The AUD is not your friend

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Mar 15 2012 21:55 | Comment |

Well, not if you are short the AUD because of all that hard landing business. Or, if you are an Australian exporter.

The Australian dollar has long been seen as a China/commodities trade, but Macquarie’s Brian Redican reckons that’s no longer the case. The currency is increasingly influenced by external factors, rather than the country’s own ever-growing mining sector, or its monetary and fiscal policy. Read more

Another piece of the LTRO puzzle

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Feb 14 2012 10:49 | Comment |

The point has been made before that rising deposits at the ECB do not, (repeat, not) indicate that banks are “hoarding liquidity”.

Here’s Guy Debelle, assistant governor at the Reserve Bank of Australia, on the subject, in a speech made earlier on Tuesday: Read more

The great Australian bond run

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Jan 18 2012 10:14 | Comment |

We noted a while back that Australia was facing a serious problem in its bond markets. In short, the country seems to be running out of public government debt.

There isn’t anywhere near enough to satisfy demand. The pressure is heightened by regulatory demands for Australian banks to hold ever more of their capital in liquid government debt securities. Read more

Manufacturing quality collateral

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Nov 25 2011 18:20 | Comment |

Regulators are demanding that banks set aside larger amounts of high-quality liquid assets to help them withstand periods of market stress.

The securities generally deemed acceptable are AAA-government bonds. Read more

Australia kills SGX-ASX deal

| Apr 08 2011 05:30 | Comment |

Canberra formally rejected Singapore Exchange’s A$8.4bn ($8.8bn) bid for its Australian rival, ruling that the takeover could undermine Australia’s position as a financial centre and the stability of its financial system, reports the FT. In a strong statement, Wayne Swan, the country’s Treasurer, on Friday told reporters it was a “no brainer” that SGX’s bid was not in Australia’s national interest and stressed the ASX’s “critically important” clearing and settlement functions. He also revealed that the Reserve Bank of Australia and securities regulator ASIC had opposed the takeover. Swan was widely criticised after indicating on Tuesday that the government was likely to block the takeover. The WSJ warns that the move “risked damaging the country’s appeal to foreign investors”. Read more

Commodities, bouncing back Down Under

| Mar 02 2011 10:14 | Comment |

After New Zealand’s earthquake and Australia’s floods and cyclones — not to mention raging fires that preceded — anyone would think someone up there had it in for the Antipodes.

Despite the ravages of weather, however, Australia seems to be living up to its “Lucky Country‘ tag. Amid fears about the economic fallout from the weather disasters of December and January, the government on Wednesday reported 0.7 per cent quarterly growth. Softer than hoped for but not nearly as bad as some feared. Read more

Australia holds rates

| Mar 01 2011 04:26 | Comment |

The Reserve Bank of Australia on Tuesday left its benchmark interest rate at the highest level in the developed world, saying a stronger currency and an earlier decline in wage growth are helping to contain inflation, reports Bloomberg. RBA governor Glenn Stevens held the overnight cash rate target at 4.75% on Tuesday, as forecast by all 25 economists surveyed by Bloomberg. The central bank expects inflation to stay within its target range of 2%-3% over the next year, he said in a statement in Sydney. After raising rates seven times from October 2009 to November 2010, the RBA is now favouring growth over containing prices as Australia recovers from flooding and cyclones. Read more

Rates on the rise in Asia

| Nov 02 2010 10:09 | Comment |

It’s central bank action month, or at least, central bankers are grabbing the limelight – even as government leaders and policy makers from around the world prepare to discuss ‘currency wars‘ and other issues at the G20 and Apec gatherings later this month.

While markets for now are fixated on the Fed’s policy meeting on Wednesday, Australia and India gave them plenty to chew on Tuesday, with rate rises that reinforced a trend towards tightening in some emerging and developed economies – even as the US and Japan eye further easing. Read more

Australia raises rates

| Nov 02 2010 04:00 | Comment |

The Reserve Bank of Australia on Tuesday unexpectedly increased the benchmark interest rate amid concerns that stronger economic growth will cause inflation to accelerate, driving the Australian dollar close to parity with the US dollar, reports Bloomberg. RBA  Governor Glenn Stevens and his board raised the overnight cash rate target by a quarter percentage point to 4.75%, the first move in six months, saying Australia’s economy “is now subject to a large expansionary shock” from trade and “relatively modest amounts of spare capacity,” and the risk of “inflation rising again over the medium term remains”. Read more

Australia holds rates as wage pressure builds

| Jul 06 2010 20:08 | Comment |

Australia’s central bank held interest rates steady on Tuesday in spite of strong new trade figures and worries about rising wage pressures. The country recorded a A$1.65bn trade surplus for May, its third-highest ever, according to data released earlier on Tuesday. Exports rose 6 per cent in value from a year before, helped in part by a rise in iron ore prices since an industry shift away from annual supply contracts, the FT reported. Read more

Australia raises benchmark rate to 4.5%

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| May 04 2010 10:35 | Comment |

Australia’s central bank on Tuesday raised interest rates for the sixth time since October, a move which could add to political pressure on the centre-left government ahead of an election later this year, the FT reported. The latest 25 basis point rise took the benchmark lending rate to 4.5 per cent and came as Kevin Rudd’s ruling Labor party suffered its worst opinion poll rating since he took power from the Liberal/National coalition in 2007. Read more

Snap news

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Apr 06 2010 07:38 | Comment |

Breaking pre-market news on Tuesday,

- Reserve Bank of Australia’s Stevens raises key interest rate to 4.25 per cent – statement. Read more

Australia raises key rate to 4%

| Mar 02 2010 05:00 | Comment |

Australia’s central bank on Tuesday raised its benchmark overnight cash rate target to 4% from 3.75%, following last month’s surprise pause, reports Bloomberg. The move by the Reserve Bank of Australia was widely predicted by economists, after RBA governor Glenn Stevens signalled last week that rates could be another 75bps  higher, and came hours after the government reported retail sales climbed 1.2% in January from December. Read more

Carry trades and reverberations Down Under

| Feb 05 2010 11:41 | Comment |

Australia might be a long way from Europe and the US, but the impact of events in those far-off regions has added to Tuesday’s surprise decision by the Reserve Bank of Australia to hold interest rates – prompting some top forecasters to call an end to the Aussie dollar’s dream run.

That comes after the Aussie dollar rose 28 per cent in 2009 against the greenback, and 31 per cent against the yen, to end the year with the third-best performance among the 16 most-active currencies. Read more

The RBA’s ‘shocker’ Down Under

| Feb 02 2010 08:23 | Comment |

Australia’s central bankers had a bit of fun on Tuesday, confounding economists, shocking markets and driving down the Aussie dollar to its lowest level in six weeks by unexpectedly holding the country’s benchmark interest rate at 3.75 per cent, rather than raising it by a widely-predicted 25bps.

As the FT reports:  Read more

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