Australia raises base interest rate by a quarter percent of the second month in a row, becoming the only country uvelichevshey borrowing costs twice in the year since the beginning of the restoration of the global economy.
Chairman of the Reserve Bank, Glenn Stevens (Glenn Stevens) today raised the overnight target rate to 3.5% in Sydney, which was predicted 18 of the 22 economists who deal with these issues in a Bloomberg News. Others expected an increase of half a percentage point.
Australian dollar and the bond yield fell as traders reduced bets on the tightening in December, after Stevens said that interest rates will "gradually" increase. Growing consumer confidence and the Chinese demand for iron ore and coal will support economic growth, while 29% market currencies this year may hurt exporters and restrict inflation, skalal it.
"Today's movement reflects a favorable balance of what it means to return back to more normal levels without sacrificing economic recovery," - said a senior economist at Commonwealth Bank of Australia, James Craig (Craig James). "We are far from confident that rates will rise again in December."
The Australian dollar fell to 90.34 cents on the dollar at 17:08 in Sydney from 90.88 cents just before the decision was announced. The yield of two-year government bond fell 19 basis points to 4.54%. Basis point is 0.01% percentage points.
Poschetam According to Bloomberg, based on interbank futures Sydney Futures Exchange, investors reduced bets that were made of the fact whether or not Stevens will increase the discount rate a quarter point on December 1. There is a 52% probability of such a step, which futures showed at 16:28, before today's decision, they were equal to 96%.
Changing prognosis
Yesterday, Treasurer Wayne Swan (Wayne Swan) said that the economy will grow faster than it previously thought, showing growth of 1.5% for 12 months to 30 June 2010. In May, he projected a 0.5% decline. GDP growth accelerated to 2,75% in the next fiscal year, "he said yesterday. The economy grew by 1% during the first 6 months of this year.
"At the meetings in October and November, regulators will be working on how to increase the sustainability of growth of business activity and keep inflation projections for the years ahead," - said Stevens.
"The Board noted that the currency appreciation is likely to limit production in the tradeables sector and ease price pressures," - he said.
Investors interested in the growth of Chinese economy, put the fact that the Australian dollar is moving towards parity with American currency, entering the list of the world's largest exporter of iron ore, used to create steel.
Hedge funds
Citigroup Inc., Calyon, Barclays Capital and National Australia Bank Ltd. predict the parity of the Australian and U.S. dollars next year, which means an additional 11% increment. Hedge funds and other large traders make more betting than any time since July 15, 2008, during which continues to rally, according to data of the Washington Commission on commodity futures trading.
Stevens gives a restrained comment on rate increases and their impact on the exchange rate, and then signals the last few months he was ready to raise borrowing costs, is tolerant to the value of the Australian dollar, as well as in future it will help to contain inflation ", in the last 12 months the Australian dollar was the strongest in relation to the rest of the 171 currencies, according to Bloomberg.
Measure the Central Bank on core inflation, or so-called weighted average consumer price index increased by 3,8% in the third quarter compared with last year, holding positions above the target band reception peak between 2% and 3% 9 consecutive quarter, says a report published Oct. 28 .
Global rate
Stevens also raised the rate a quarter point on October 6. Only a few countries in this year raised interest rates, it was Israel and Norway. On the other hand, the U.S. Federal Reserve maintained the initial rate of close to 0 throughout the year. The rates of the ECB and the Bank of England are at a record low of 1% and 0.5% respectively.
"No more tough talk in today's statement clearly signals that the Reserve Bank will depart from the policy of enabling" progressively ", that is the key word, which once was used in today's statement," - said Stefen Walters (Stephen Walters), the main Economist, JPMorgan Chase & Co. in Sydney.
Stephens also ruled us today with the last statement made at a bank meeting in October, saying that "too soft" monetary policy probably would be "unwise decision."
Timid Changes
"Subtle changes in the tone of comments indicate that the officials tend to think of each meeting on the merits" - said Walters.
The Australian economy is growing faster and creating more jobs than the Treasury and Prime Minister Kevin Rudd (Kevin Rudd) predicted for the 6 months prior to that, providing state support to customers in the amount of A $ 20 billion ($ 18 billion) and Stivensovskomu record cuts in interest rates between September 2008 and April, when it reduced the initial rate of 4.25% up to a half-century low of 3%.
It is expected that unemployment will peak at 6.75% in the second quarter of next year, well below the 8.5% forecast in May for three months until June 30, 2011, said yesterday the government.
The current increase in interest rates will not change anything in the context of a national shortage of housing stock, said the chief economist of the Housing Industry Association Harley Dale (Harley Dale).
"For the Reserve Bank would be comfortable to sit on their hands" - said Dale.
Raising interest rates will add an additional A $ 50 to monthly payments for a mortgage loan from a loan in the amount of A $ 300,000. Australia & New Zealand Banking Group Ltd., Commonwealth Bank, National Australia Bank Ltd. and Westpac Banking Corp. have raised their mortgage rates by a quarter per cent after yesterday's announcement.
Hard decisions
"Today's decision is difficult for Australian families and businesses, but it makes it clear that the stakes could not stay at its lowest level in 50 years ever" - told reporters today Swann from Brisbane.
The report, published in the last few days, shows that bank lending fell unexpectedly in September for the first time in 9 months against a background of weak demand for business loans and slowing growth in industrial production in October.
"It seems that the Reserve Bank is right" - said the billionaire and president of Australian retailer Harvey Norman Holdings Ltd., Gerry Harvey (Gerry Harvey) in today's interview.
"Those people who look at interest rates of 3,5%, say to themselves that they are still low and still lower than they were paying before," - said Harvey on the phone. "This should not greatly affect the market."
Chairman of the Reserve Bank, Glenn Stevens (Glenn Stevens) today raised the overnight target rate to 3.5% in Sydney, which was predicted 18 of the 22 economists who deal with these issues in a Bloomberg News. Others expected an increase of half a percentage point.
Australian dollar and the bond yield fell as traders reduced bets on the tightening in December, after Stevens said that interest rates will "gradually" increase. Growing consumer confidence and the Chinese demand for iron ore and coal will support economic growth, while 29% market currencies this year may hurt exporters and restrict inflation, skalal it.
"Today's movement reflects a favorable balance of what it means to return back to more normal levels without sacrificing economic recovery," - said a senior economist at Commonwealth Bank of Australia, James Craig (Craig James). "We are far from confident that rates will rise again in December."
The Australian dollar fell to 90.34 cents on the dollar at 17:08 in Sydney from 90.88 cents just before the decision was announced. The yield of two-year government bond fell 19 basis points to 4.54%. Basis point is 0.01% percentage points.
Poschetam According to Bloomberg, based on interbank futures Sydney Futures Exchange, investors reduced bets that were made of the fact whether or not Stevens will increase the discount rate a quarter point on December 1. There is a 52% probability of such a step, which futures showed at 16:28, before today's decision, they were equal to 96%.
Changing prognosis
Yesterday, Treasurer Wayne Swan (Wayne Swan) said that the economy will grow faster than it previously thought, showing growth of 1.5% for 12 months to 30 June 2010. In May, he projected a 0.5% decline. GDP growth accelerated to 2,75% in the next fiscal year, "he said yesterday. The economy grew by 1% during the first 6 months of this year.
"At the meetings in October and November, regulators will be working on how to increase the sustainability of growth of business activity and keep inflation projections for the years ahead," - said Stevens.
"The Board noted that the currency appreciation is likely to limit production in the tradeables sector and ease price pressures," - he said.
Investors interested in the growth of Chinese economy, put the fact that the Australian dollar is moving towards parity with American currency, entering the list of the world's largest exporter of iron ore, used to create steel.
Hedge funds
Citigroup Inc., Calyon, Barclays Capital and National Australia Bank Ltd. predict the parity of the Australian and U.S. dollars next year, which means an additional 11% increment. Hedge funds and other large traders make more betting than any time since July 15, 2008, during which continues to rally, according to data of the Washington Commission on commodity futures trading.
Stevens gives a restrained comment on rate increases and their impact on the exchange rate, and then signals the last few months he was ready to raise borrowing costs, is tolerant to the value of the Australian dollar, as well as in future it will help to contain inflation ", in the last 12 months the Australian dollar was the strongest in relation to the rest of the 171 currencies, according to Bloomberg.
Measure the Central Bank on core inflation, or so-called weighted average consumer price index increased by 3,8% in the third quarter compared with last year, holding positions above the target band reception peak between 2% and 3% 9 consecutive quarter, says a report published Oct. 28 .
Global rate
Stevens also raised the rate a quarter point on October 6. Only a few countries in this year raised interest rates, it was Israel and Norway. On the other hand, the U.S. Federal Reserve maintained the initial rate of close to 0 throughout the year. The rates of the ECB and the Bank of England are at a record low of 1% and 0.5% respectively.
"No more tough talk in today's statement clearly signals that the Reserve Bank will depart from the policy of enabling" progressively ", that is the key word, which once was used in today's statement," - said Stefen Walters (Stephen Walters), the main Economist, JPMorgan Chase & Co. in Sydney.
Stephens also ruled us today with the last statement made at a bank meeting in October, saying that "too soft" monetary policy probably would be "unwise decision."
Timid Changes
"Subtle changes in the tone of comments indicate that the officials tend to think of each meeting on the merits" - said Walters.
The Australian economy is growing faster and creating more jobs than the Treasury and Prime Minister Kevin Rudd (Kevin Rudd) predicted for the 6 months prior to that, providing state support to customers in the amount of A $ 20 billion ($ 18 billion) and Stivensovskomu record cuts in interest rates between September 2008 and April, when it reduced the initial rate of 4.25% up to a half-century low of 3%.
It is expected that unemployment will peak at 6.75% in the second quarter of next year, well below the 8.5% forecast in May for three months until June 30, 2011, said yesterday the government.
The current increase in interest rates will not change anything in the context of a national shortage of housing stock, said the chief economist of the Housing Industry Association Harley Dale (Harley Dale).
"For the Reserve Bank would be comfortable to sit on their hands" - said Dale.
Raising interest rates will add an additional A $ 50 to monthly payments for a mortgage loan from a loan in the amount of A $ 300,000. Australia & New Zealand Banking Group Ltd., Commonwealth Bank, National Australia Bank Ltd. and Westpac Banking Corp. have raised their mortgage rates by a quarter per cent after yesterday's announcement.
Hard decisions
"Today's decision is difficult for Australian families and businesses, but it makes it clear that the stakes could not stay at its lowest level in 50 years ever" - told reporters today Swann from Brisbane.
The report, published in the last few days, shows that bank lending fell unexpectedly in September for the first time in 9 months against a background of weak demand for business loans and slowing growth in industrial production in October.
"It seems that the Reserve Bank is right" - said the billionaire and president of Australian retailer Harvey Norman Holdings Ltd., Gerry Harvey (Gerry Harvey) in today's interview.
"Those people who look at interest rates of 3,5%, say to themselves that they are still low and still lower than they were paying before," - said Harvey on the phone. "This should not greatly affect the market."
Bloomberg
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