Summary:
As reported on Thursday, the Australian economy expanded by 1.3% in the first quarter, the same pace as in the previous quarter but lower than the expected 1.5% growth. The soft growth was attributed to declining public spending and weakened consumer demand and exports. The subdued growth—attributed to shrinking public spending, weaker consumer demand, and reduced exports—has reinforced expectations of further monetary easing by the RBA. Markets are now implying an 82% probability of a rate cut in July, up from 77% prior to the data release.
Additionally, PMI surveys indicated slowing expansion in the services and manufacturing sectors in May. The trade surplus also narrowed, reflecting a monthly decline in exports due to moderating overseas demand. These weakening economic indicators support the case for further monetary easing by the central bank, especially given the latest RBA minutes, which emphasized that future policy decisions will remain data-dependent.
Figure 1: Swaps on RBA Rate Cutes
| Product | Interest Rate p.a. | Notes |
|---|---|---|
| AMP Saver Account | 4.95% | This is the total variable rate which applies to balances up to $500,000, made up of the standard rate and the Bonus Interest Rate (subject to eligibility). |
| ANZ Premium | 0.05% | $10,000 - $499,999 |
| ANZ Progress Saver | 3.75% | Make at least one deposit of $10 or more in a month, make no withdrawals (including transfers), or incur any fees, charges in the month. |
| Arab Bank Online Savings | 3.90% | On balances of $250,000 to $499,999 |
| Bankwest Hero Saver | 4.35% | On balances up to $250,000.99 with no withdrawals in that month |
| BOQ Fast Track Saver | 2.50% | $1000 minimum monthly deposit. On balances up to $250,000, over part the Base Rate of 0.05% p.a. applies |
| BoQ Bonus Interest Savings | 5.25% | Bonus interest is paid into your account when you limit your withdrawals to a maximum of one per month |
| CBA NetBank Saver | 4.90% | Introductory variable rate during the first 5 months of your first NetBank Saver (includes fixed bonus margin of 2.75% p.a.) |
| CBA Goal Saver Account | 4.65% | At least 1 deposit required; balance at end of month must exceed balance at start of month. |
| Great Southern Bank | 4.50% | No bonus conditions |
| Heritage Online Saver | 4.65% | a 4 month Bonus Intro Rate* available for new members on balances up to $100,000. |
| ING Savings Accelerator | 4.45% | $150,000 and over |
| Macquarie CMA | 2.75% | Minimum $5,000 |
| ME Online Savings | 4.25% | Bonus interest applies to balances up to $500,000. |
| NAB iSaver | 4.90% | This is the total rate (standard variable rate plus fixed bonus margin rate) you could earn for the first four months, if you have not held a NAB iSaver in the last 12 months (on balances up to $20 million). |
| NAB Reward Saver | 4.65% | This is the total rate (variable base rate + variable bonus rate) you could earn on your NAB Reward Saver account if you meet the variable bonus rate conditions. |
| Rabobank PremiumSaver | 5.10% | On balances to $250,000. Balance increased by $200 a month. |
| RAMS Saver Account | 1.40% | On balances to $500,000. Minimum $200 deposit each month with no withdrawals. |
| Suncorp Growth Saver | 4.80% | Minimum $200 deposit each month and no more than 1 withdrawal |
| ubank Save Account | 5.10% | 5.5% on first $100,000, 5.0% on next $150,000; applies only on amounts upto $250,000. Minimum $500 deposit each month into Spend or Save accounts. |
| Up Savers Account | 4.35% | Make 5 successful purchases using your Up or 2Up debit card or digital wallets in a month. |
| Westpac eSaver | 4.75% | 3.40% p.a. for the first 5 months for new Westpac eSaver customers |
| Westpac Reward Saver | 5.00% | Make a deposit to the account and ensure account balance is higher at the end of the month than the beginning. Keep your account balance above $0 at all times. |