The week contained quite a few pieces of domestic economic data and a Goldman Sach’s report that said the RBA would cut cash rates two times – once in May and once in July – to a cash rate to 1.50%.
New car sales figures were out on Monday and they were higher than expected, the RBA February minutes were out the next day and, given the proximity of this report to the quarterly Statement on Monetary Policy, there was nothing really new and they had little effect. A weak Westpac-Melbourne Institute Leading Indicator suggested a subdued economy ahead and finally a shock rise in the unemployment rate to 6.00% caused any optimism to be tempered.
Despite the Goldman’s call, cash market pricing discounted the chances of a rate reduction in the months through to the end of the financial year while increasing the odds of a rate cut in the months after, effectively deferring the expected implementation of the rate cut scenario. However, the cash markets are still placing a high probability of a cut by June (74% chance) and it is still seen as a certainty by August. What’s more, the cash markets are rating the odds of a second rate cut down to 1.50% before the end of December at 44%, and the odds rise to 60% by June 2017.
There was one change to rates in our cash accounts table over the week. The RAMS Saver Account rate was reduced from 3.40 to 3.15%. Before this reduction this account was offering the highest rate of any of the accounts which YieldReport tracks. The title is now held by UBank’s USaver Ultra account.
|Product||Int p.a.||Special Cond|
|AMP Saver Account||2.60%||31 days notice|
|AMP Notice Account||2.70%|
|ANZ Progress Saver||2.51%||Min balance $5,000|
|Arab Bank Online Savings||2.30%||Up to $500k.|
|Bankwest Smarter Esaver||2.80%||Zero w/draw pm up to $500k|
|BoQ Cash Man Account||2.05%||Limit 1 w/draw pm|
|BoQ Bonus Interest Savings||2.75%||$250k+|
|CBA NetBank Saver||1.80%||$200pm dep, $100k lim, 1wd pm|
|CBA Goal Saver Ac||2.70%|
|CUA eSaver Plus Account||2.90%|
|Heritage Online Saver||2.70%||$750,000+|
|ING Savings Accelerator||2.75%||$150k+|
|ME Online Savings||1.80%|
|NAB Reward Saver||3.10%||1 dep no w/draw mth|
|Rams Saver Account||3.15%||$200 pm no withdrawal|
|USaver||2.31%||$200 pm up to $200k|
|USaver Ultra||3.37%||Up to $200k +$2k pm dep|
|Westpac Reward Saver||2.50%||dep $50 and no withdrawals|