News

A fall in the number of Australian jobs advertised on the internet fell to a 10-month low in May according to the Department of Employment. There were 153,524 (s.a.) jobs advertised in May and that was 3.1% lower than in April and only 0.2% higher than May last year. The trend measure fell by 1.0%. The ANZ’s Job Advertisement series shows annual growth of 15% although the trend has slowed from 16% a year ago to 5.0% in May. The ANZ series counts all existing advertisements carried on internet job sites, while the Department Employment measure is based on newly lodged advertisements. The numbers are being relied upon more as an indicator of employment growth given the consistent queries about the validity of recent ABS unemployment statistics.

The Customer Owned Banking Association has launched a campaign to stop the federal government’s proposed deposit tax. COBA CEO Mr Degotardi said, “Deposits are the simplest and safest way for Australians to save for their future, yet they are already far more heavily taxed than other investments”. COBA has launched the Save Your Savings campaign pointing out that the deposit tax is anti-saver, anti-competitive and against the recommendations of the independent Financial System Inquiry. “A deposit tax will hit pensioners with deposit accounts who are enduring low returns due to record low interest rates”, said Mr Deogtardi.

Moody’s is concerned Macquarie Group’s balance sheet may become strained if the bank continues to expand its leasing and mortgage businesses at the rate it has been doing so since the GFC. While Macquarie’s current balance sheet is seen as being conservative and its areas of activity generally stable, “Moody’s also sees Macquarie’s reliance on wholesale funding as mitigated by its conservative liquidity policy, growing diversity of funding sources and a sizeable deposit book.” Macquarie’s mortgage book has more than doubled in the past two years and its leasing portfolio has nearly trebled since 2009.

International Monetary Fund chief Christine Lagarde said the US Federal Reserve should delay raising rates and an IMF staff paper suggested the Fed Reserve’s publishing of committee members’ interest rate projections be dropped. This diagram, often referred to as the “dot plot” diagram, shows the aggregate of officials’ views but without stating which official holds each view. The dots, each one representing a member of the Fed, “do not provide a clear picture of the Federal Open Market Committee’s majority view.”

Rabobank Nederland (A+/Aa2/AA-) launched a new Australian dollar tier-two kangaroo note. This is the first deal in the kangaroo market from the parent company for more than a decade. Read more

Last week saw the back and forth tussle between the Greek government and the ECB/IMF unsettle global markets. At the end of the week, the Greek government rejected the IMFs latest bailout proposal and the second Greek programme of support will now expire on Tuesday 30 June. Greek prime minister, Alexis Tsipras, has closed the banks and imposed capital controls telling his countrymen that their bank deposits are safe. Greeks have been withdrawing huge sums of cash from banks fearing that they may not get access to their money or that their euro will be forcibly converted to a new Greek currency. Tsipras also declared a 5 July referendum on the terms of the bailout deal which he has described as a “blackmail ultimatum”. He asked for voters to declare an “emphatic no” to the ECB/IMF proposals.

Australian government bonds fell 2.4% from the end of March to 25 June, 2015. There is typically a negative correlation between the S&P/ASX 200 and the Bloomberg AusBond index of Australian government bonds but this turned positive in May for the first time since March 2014.

Daniel James, the IMF’s mission chief to Australia, said economic growth was likely to be around 2.5% over the longer term which is below forecasts of about 3.5% outlined in the May budget. The visiting IMF team urged the government to boost infrastructure spending, toughen controls on banks making increasingly risky loans to property investors and to control recurring federal government expenditure. They also called on the Government to lower income and company taxes, eliminate stamp duties, broaden the base of the GST and possibly raise the rate. Mr Daniel said the current 2.0% cash rate was “broadly appropriate but we’re seeing an implicit easing bias because we see the balance of risks tilted to the downside”.

A report in the Financial Review suggests a secret Treasury memo has warned that NSW will face a tough task in keeping its AAA rating under the state’s electricity sale plan. The Treasury document warned that leasing 51% of the state’s electricity assets and investing the entire amount into infrastructure would likely worsen the state’s standing under the Moody’s ratings system.

Less firms reported rising unit costs in the June quarter when compared with the March quarter according to the ACCI-Westpac survey. A net 6% of firms reported a rise in unit costs compared with a net 29% in March. Similarly, a net 2% of survey participants expect to increase prices in the coming quarter, compared with a net 6% in March.