RBA leaves overnight cash at 3%. Three year rates remain 140 to 150 above cash.
Good afternoon.
The RBA has left the cash target rate at 3%, for the 3rd month in a row. The outcome was widely forecast following a month of strong domestic data, and signs that China's demand for commodities is on the rise. Having paused for the past two, there are no signs of immediate disturbance for the Australian economy, which continues to out perform all major economies.
Here is a link to the RBA statement
The main change in the RBA rhetoric this month is subtle , and here are some of the changed comments
-
Downside risks to the outlook have diminished
-
Economic conditions in Australia have to date not been as weak as expected a few months ago.
-
A pick-up in housing credit demand suggests stronger dwelling activity is likely later in the year.
-
The Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed. (RBA adds "some" and qualifies the scope to ease.)
The chart below show the sharp upward movement in three year fixed rates over the course of 2009.
Three swap rates ( in Green) have risen sharply this year, peaking at 4.93% and easing back to 4.57% and more than 150 over the RBA cash target rate. Three year swap rates are a major component of fixed rate mortgages.
Three Government bond rates ( in White) have also risen sharply this year, with the 3 year generic government bond yield now at 4.35% after a low this year at 2.87%. The rise in fixed rates is a result of increasing issues of Government and will impact on both fixed and floating rates.
With kind regards
|
If you wish to have any of the above points explained, wish to make a trade or
have any further enquiries please contact John Craig by phone on
(02) 8243 3526 or by email:
jcraig@bellcommodities.com.au |
|
