At the start of the month the RBA reduced the official rate to 1.50% as many economists had expected. While inflation, or lack of it, is viewed as the driver behind the decision, some analysts are suggesting the ‘high’ currency was equally important in the RBA’s thinking. The August SoMP added little except it confirmed the market’s view the RBA has an easing bias and another cut down to 1.25% is not an unrealistic expectation.
While consumers were slightly more optimistic, comments accompanying the NAB Business survey caused a stir, firstly by its prediction of a slowdown in the Australian economy and secondly by re-iterating a forecast first made by an ANZ economist of the prospect of “non-conventional” monetary policies in Australia.
The RBA minutes were a non-event and at best it was hoped some indication as to the closeness of the decision to cut would be given. Under-employment had been raised as an issue at July’s RBA meeting; July Labour Force figures seemed to confirm this as all the growth was via part time jobs, while full time employment fell.
The prevailing view among economists is the RBA is done for 2017 and it will wait until 2017 to act again. Pricing in cash markets suggests otherwise and November is a 44% chance for another 25bps cut and by August 2017 a 1.25% rate is viewed as a certainty.
|Product||Int p.a.||Special Cond|
|AMP Saver Account||2.10%||31 days notice|
|AMP Notice Account||2.20%|
|ANZ Progress Saver||2.01%||Min balance $5,000|
|Arab Bank Online Savings||1.90%||Up to $500k.|
|Bankwest Smarter Esaver||2.20%||Zero w/draw pm up to $500k|
|BoQ Cash Man Account||1.55%||Limit 1 w/draw pm|
|BoQ Bonus Interest Savings||230%||$250k+|
|CBA NetBank Saver||1.25%||$200pm dep, $100k lim, 1wd pm|
|CBA Goal Saver Ac||1.95%|
|CUA eSaver Plus Account||2.75%|
|Heritage Online Saver||2.25%||$750,000+|
|ING Savings Accelerator||1.90%||$150k+|
|ME Online Savings||1.30%|
|NAB Reward Saver||2.95%||1 dep no w/draw mth|
|Rams Saver Account||3.15%||$200 pm no withdrawal|
|USaver||1.81%||$200 pm up to $200k|
|USaver Ultra||2.87%||Up to $200k +$2k pm dep|
|Westpac Reward Saver||1.85%||dep $50 and no withdrawals|