RBA August 2016 Interest Rate Decision

I guess the linked graph carries a second-order implication of a rate cut but maybe later in the year.

I can tell you now I won't get a 0.25% reduction in my mortgage rate; the returns are diminishing with each RBA cut.

Off-topic, what are people's thoughts on fixing a mortgage interest rate now that they are lower than variable rates? If you look at the US, official rates are 0.5% but mortgage rates are barely lower then ours. Savings interest rates on the other hand...
 
HoldMeTender said:
I guess the linked graph carries a second-order implication of a rate cut but maybe later in the year.

I can tell you now I won't get a 0.25% reduction in my mortgage rate; the returns are diminishing with each RBA cut.

Off-topic, what are people's thoughts on fixing a mortgage interest rate now that they are lower than variable rates? If you look at the US, official rates are 0.5% but mortgage rates are barely lower then ours. Savings interest rates on the other hand...
Click to expand...

That's a good question. I will be keenly watching how any future RBA rate cuts impact mortgage interest rate. If negligibly, then locking in a fixed rate may provide some protection and advantage over the course of the investment.
 
will there be a leak again a few minutes before the announcement like last time?
 
Bullion Baron said:
Probably cut given the inflation stats this week.

HoldMeTender said:
I can tell you now I won't get a 0.25% reduction in my mortgage rate; the returns are diminishing with each RBA cut.
Click to expand...
I think most banks passed on the full cut last time.
Click to expand...

Not mine.. I assumed they were all keeping a bit for themselves. At these low rates I would expect the gap to increase with each cut.
 
I bet it'll stay as is... Cause RBA knows that bank will not pass fully.... And if banks end up jacking up, then RBA will definitely put 25 points the following month
 
bubblebobble2 said:
I bet it'll stay as is... Cause RBA knows that bank will not pass fully.... And if banks end up jacking up, then RBA will definitely put 25 points the following month
Click to expand...

sounds like reasonable logic !
therefore they'll cut probably
:)
 
Down.....Aussie dollar is too high
RBA still want the to see the AUD in 60's not 70's
 
Actually it's going up 0.5.

Maintaining my theory that there's an inverse relationship between my calls and reality.
 
Personally, I feel that the RBA would much prefer to hold off, in fact wanted to hold off last time, and to keep rates at 2%.

I am sure they know as well as we do what is on the horizon, and that 2% would be helpful in 4x .5% or maybe 1x 1% and 2x .5% reductions all in quick succession.




JMO


OC
 
Bullion Baron said:
Probably cut given the inflation stats this week.

HoldMeTender said:
I can tell you now I won't get a 0.25% reduction in my mortgage rate; the returns are diminishing with each RBA cut.
Click to expand...
I think most banks passed on the full cut last time.
Click to expand...

I think NAB didn't pass on the full cut?

This is going to become an issue though, the further the RBA cuts to zero as it's going to be harder for the banks to turn a profit and the costs of their short-term overseas borrowing isn't getting any cheaper. At the moment, the banks are hoping that they can still stimulate the housing market by passing on the cut but it wouldn't surprise me if they all didn't pass on the full cut next time.
 
Everything that I look at is pointing to a cut

2 year Australian bonds are yielding 1.46%

RBA rate indicator is saying there's a 64% chance of a rate cut but that was before the weak US GDP figures last night

Headline inflation is still soft even though core inflation was a little higher than expected

PPI figures and trade figures were soft

The Aussie dollar is stronger than the RBA would like, but even if they do cut the economy isn't weak enough yet to maintain a lower currency. It wouldn't surprise me if the RBA cuts, the Aussie sells off briefly (a day or two) only to rally at least back to where it is now on the weak US GDP figures pointing to the FED not raising interest rates September.

Anyway, I'm saying the RBA will cut
 
AUD down less than half a cent on the move and the ASX has barely responded.

Mr Market was hardly surprised......
 
You must log in or register to reply here.
Back
Top