There were two events of notes in relation to the RBA and monetary policy. The first was the February board meeting of the bank where cash rates were left unchanged as expected. The second was the Quarterly Statement on Monetary policy, released at the end of the week. The SoMP said that “there has been a notable improvement in labour market conditions that was not anticipated at the time of the previous Statement” and that inflation forecasts “have not changed materially. Unemployment was revised lower and the Bank retained its easing bias.
Cash markets responded by reducing slightly their expectation of a rate cut in 2016 while modestly increasing expectations in November 2016 and beyond. Market pricing implied that participants are still fully factoring in a reduction in the official rate down to 1.75% by September, with a significant probability it will happen even earlier. What’s more, the odds of a second rate reduction down to 1.50% by the end of 2016 is rated at a 50% probability.
There were two changes to rates in our cash accounts table over the week. Bank of Queensland reduced its rate by 20 bps from 2.15% to 2.05% and Me bank also reduced its rate by 20bps, but from 2.00% to 1.80%.
|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||3.40%||$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|