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Got Interest Rate thread

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rams saver 5.01%

easystreet bonus saver 4.68%

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ubank usaver 4.66%

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newcastle permanent building society online savings account 4.65%

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ford co-operative credit society isaver account 4.50%

qantas staff credit union bonus saver 4.50%

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...

RBA 3.00%

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Soros betting on a rate cut?

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The Australian dollar fell in evening trade on the back of rumours that billionaire US investor George Soros is planning to short the currency.

The Aussie dollar slipped from $US1.0284 in late local trade to $US1.0253 in offshore trade as traders reacted to unconfirmed rumours that Mr Soros - who famously shorted the British pound back in 1992 - was planning a raid on the dollar ahead of Tuesday's interest rate announcement.

A large number trades shorting the dollar totalling $US1 billion were placed via Hong Kong and Singapore late Monday, believed to be by Soros Fund Management.

"Someone has picked a mark around $US1.0270 and seems to be betting on a rate cut," said one Sydney-based FX trader. "I've heard the George Soros rumour tonight. A billion dollars sounds like a lot, but it's not enough to move the Australian dollar and it's not a lot for George Soros, but there is a play happening in the FX market.

Advertisement"If it is him, it's probably a bet on a rate cut. These days a billion bucks can't do much to the Aussie."

Mr Soros is a Hungarian-American business magnate, investor and philanthropist, who has built a reputation over the past 25 years of picking the impact of goverment decisions on currencies and commodities.

In 1992, based on British government policy changes, Mr Soros famously shorted the British pound. He bought German marks, earning a staggering $US1.8 billion profit for his fund. It is known as the day George Soros "broke" the Bank of England.

Mr Soros sold out of gold investments late last year, sparking rumours that he would again be active in global currency markets.

According to reports out of Japan, his investment company has made $US1 billion by shorting the yen between November 2012 and February this year.

Whatever the result of the rumour, it will certainly be better news for Mr Soros - news agency Reuters prematurely declared him dead in mid-April, accidentally publishing his obituary.

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1367901312[/url]' post='67275']

Official cash rate dropped another 0.25% to 2.75%

Australian economy is toast. Engineering market is dead. Loads of redundancies going on. Flow on affect to the wider economy will be massive.Media cr@ps on about housing and retail but not focusing on what is happening with rest of economy.

Not possible to pay a mortgage without an income.

Tick tick tick...house p r i c e s

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Australian economy is toast. Engineering market is dead. Loads of redundancies going on. Flow on affect to the wider economy will be massive.Media cr@ps on about housing and retail but not focusing on what is happening with rest of economy.

Not possible to pay a mortgage without an income.

Tick tick tick...house p r i c e s

I tend to agree about the economy. Unless you're a trader who knows what he/she is doing, I doubt the long side of the AUD is going to be a good place for some time.

All the bad omens are lining up, states and feds cutting budgets due to deficits, manufacturing has been decimated, mining projects cut, consumer maxed out on credit ... I'm expecting all the negative feedback loops between housing, investment, austerity and bailouts to show up here.

Unless of course these guys make another appearance:

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Official cash rate dropped another 0.25% to 2.75%

But but but... I thought 3% OCR was at emergency levels... so what is 2.75%?

Best metaphor for central bankers I can think of right now.

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But but but... I thought 3% OCR was at emergency levels... so what is 2.75%?

Doing something without doing anything. They still don't get it. They need to truly shock the people. How do you truly shock the people? You do the exact opposite of what the status quo has been for the last decades. You raise rates. It would ring in a generational change and people would automatically make all the adjustments society constantly talks about.

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Doing something without doing anything. They still don't get it. They need to truly shock the people. How do you truly shock the people? You do the exact opposite of what the status quo has been for the last decades. You raise rates. It would ring in a generational change and people would automatically make all the adjustments society constantly talks about.

start hiking rates and whenever hot money from OS comes in or the dollar rises just print cash until the Aussie is (plucks figure from the air) US$0.75 give or take 5 cents.

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Doing something without doing anything. They still don't get it. They need to truly shock the people. How do you truly shock the people? You do the exact opposite of what the status quo has been for the last decades. You raise rates. It would ring in a generational change and people would automatically make all the adjustments society constantly talks about.

ZIRP has made no difference to the state of the economy in countries where it has been implemented. In fact it has made it worse as people dependent on fixed income (eg. pensioners) are exhausting their savings, meaning that they will be asking for a government pension sooner. Yet the RBA is following the same path! wacko.gif

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Doing something without doing anything. They still don't get it. They need to truly shock the people. How do you truly shock the people? You do the exact opposite of what the status quo has been for the last decades. You raise rates. It would ring in a generational change and people would automatically make all the adjustments society constantly talks about.

I'm with you, Syd - jack those rates up, kill the parasites then drop them to allow real business to grow.

Won't happen, of course.

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Cobran - do you have a chart of the 90 day bank bill rate? It may again be the case of the RBA following the market.

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Cobran - do you have a chart of the 90 day bank bill rate? It may again be the case of the RBA following the market.

data as of 8/5/2013.

post-148-054744800 1368084899_thumb.jpg

post-148-056731000 1368084905_thumb.jpg

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QUESTIONING THE CASH RATE SWINDLE

The Reserve Bank of Australia (RBA) is a statutory authority whose duty is to contribute to the stability of the currency, to full employment, and to the economic prosperity and welfare of all Australians.

The RBA sets the cash rate in order to meet a medium-term inflation target. It also issues Australia’s banknotes and manages its gold and forex reserves.

Sometimes it increases the cash rate, the overnight lending rate, and sometimes it decreases it – usually by 25 basis points or 0.25%.

Let’s look at the rationale for increasing interest rates. “The economy is performing too well and has to be slowed.” Oh? It’s the RBA job to put the brakes on a healthy economy? Can it be too healthy?

“There’s incipient inflation that might take us past our target inflation rate.” That’s more like it; but then what has induced these inflationary pressures? Surely not the ‘velocity of money’? That’s an effect rather than a cause?

Sometimes, in my wild erratic imaginings, I even start to think it may possibly have something to do with the non-productive, or speculative, side of the economy. But then I say to myself: “Self, that could not be right at all, because that’s not what Reserve Bank and all those bright financial analysts tell us.” They say the whole economy must be slowed by making the cost of money generally higher, effectively including people’s mortgages, business loans and venture capital.

Silly me, because the extension of my stupid line of reasoning would have the bank selectively target speculative real estate activity and leave wealth creation efforts alone, instead of making money dearer for everyone! But who really wants to tax speculative rent-seekers or have lower interest rates for businesses, workers and genuine investors – only a killjoy, surely?

Then there are times like these, when the RBA has been busy cutting the cash rate. We’re down to 2.75% here in Oz–not as low as many countries– but we may not have finished lowering interest rates yet. So, what’s going on in this case?

Well, the economy is rapidly slowing down and farmers, shopkeepers and many other businesses are feeling it – so the RBA’s got to help them out with lower interest rates.

But why’s the economy slowing down? Well, many people are in debt, especially mortgage debt, because of the gigantic real estate bubble we’ve experienced, and still the bills keep rolling in. People need assistance with credit.

But aren’t real estate bubbles, by their very nature because they end up bursting, part of the speculative bubble developed by the banking and real estate industries – so won’t the lower interest rates tend to attract more people back into the bubble housing market, acting to stop it from correcting, keeping house prices high? Doesn’t this just aid the banks, not the people?

So it’s the RBA’s job to assist bank profits? But the RBA’s charter, spelled out in the first paragraph above, doesn’t mention this to be its duty. Shouldn’t it be targeting speculators, both on the upside and down, instead of helping them rip Australians off? Is the RBA therefore breaching its charter? No? Why not?

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The bond yields may be rising, but IMO the short term still looks bearish.

A turn for the worse last Friday!

post-148-011070300 1373879450_thumb.jpg

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The 90 days are on the side of the economists so far.

Economists favour rate cut on August 6

The majority of economists expect the RBA to cut the cash rate to a new record low of 2.5% on August.

Of the 28 economists polled by Bloomberg just before the weekend, 22 expect the RBA to reduce the cash rate to fall by 25 basis points.

ANZ chief economist Warren Hogan is the most notable exception among the six economists expecting the RBA to hold fire.

The others are from Deutsche Bank, J.P. Morgan, Merrill Lynch, QIC and TD Securities.

Looking beyond August, no further rate cut is forecast on September 3 with all economists' surveyed maintaining their August positions.

Beyond September and views are quite divergent.

Macquarie Research and Westpac's Bill Evans foresee a 2% cash rate, the former before the end of the year and the later by the first quarter 0f 2014.

However, Shane Oliver from AMP Capital, expects the cash rate to start rising from the first quarter of 2014 to 2.75% and to reach 3.5% by the end of 2014.

The median view is a cash rate of 2.63% (so either 2.5% or 2.75%) by the end of 2014 - suggesting rates could remain low throughout next year.

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As of yesterday, the only question is whether it will be a 0.25 or 0.5% cut next Tuesday!

0.25% cut. dontgetit.gif

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Get ready for the next cut. But don't worry 'cause the CPI tells us we have no inflation. All that extra money you pay to buy the same thing from year to year is purely a figment of your imagination! censored.gif

post-148-068107400 1379676855_thumb.jpg

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Get ready for the next cut. But don't worry 'cause the CPI tells us we have no inflation. All that extra money you pay to buy the same thing from year to year is purely a figment of your imagination! censored.gif

Would it be fair to say that this action is a result of the Sep-taper that wasn't?

If so, and we ultimately get a Nov-taper or a Dec-taper, could the RBA be forced to hike? That sort of signal ("easing is over?!") would lead to a lot of brown pants...

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If you check the 8501.0 retail trade by industry release of the ABS for September 2013 you will note that every single sub-category trend value is pointing up. The next interest rate move by the RBA will be up and it might happen before Christmas.

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If you check the 8501.0 retail trade by industry release of the ABS for September 2013 you will note that every single sub-category trend value is pointing up. The next interest rate move by the RBA will be up and it might happen before Christmas.

 

 

A rate rise before the end of this year would have to be one of the most unexpected surprises to say the least. As of last week, the only thing the markets are predicting is no change tomorrow.

Central banks will not react until long after the horse has bolted. So I'd be surprised if the hiked the rates much before the middle of 2014. But it would be nice if you're right!

post-148-0-82014800-1383548033_thumb.jpg

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It will be interesting to read the RBA's comments next week.

 

SMH: Reserve Bank of New Zealand keeps rate on hold, for now

 

 

The Reserve Bank of New Zealand has kept the official cash rate at its record low of 2.5 per cent but governor Graeme Wheeler has again signalled that a rise is not far off.

In his first rate review of 2014, Mr Wheeler said that while headline inflation has been moderate, inflationary pressures are expected to increase over the next two years.

"In this environment, there is a need to return interest rates to more normal levels. The bank expects to start this adjustment soon," he said in a statement on Thursday...

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