In fact, in recent weeks, the Aussie battler has ground its way higher, punching through US77c as the greenback weakened over the latest travails from US President Donald Trump.
Building approvals — a important forward-looking indicator — fell again in May. Wages growth remains low. If they have to pay more, they will pass those costs on. If a purchaser has overpaid for a quarry business, then quite often the return on capital factors through to the selling prices of the products, and often makes them uncompetitive compared to rival operators, and in turn, reduces the outputs and profits until such stage as the quarry business fails.
The banks responded by raising rates, particularly on interest only loans, which mostly are used by investors.
The RBA wants a weaker dollar The pundits were stunned when Dr Lowe failed to match his global counterparts this month with hints at higher rates.
While those efforts to start on the long road to bringing rates back to something approaching normal should be commended, there's just one problem with the argument. Australia is in a radically different position to the rest of the developed world. The idea back in was to pump up the east coast housing and construction markets to absorb all those workers coming out of the west coast resources boom.
Rogue Sales and Over Valuation There is a notable difference between Premiums and Discounts and Rogue Sales, in that Premiums and Discounts are often quantifiable whereby the benefits can be easily identified and equated into a benefit to other parts of the purchasers business.
The statement balanced the impact of potentially higher mortgage rates and tighter lending standards with the view that the average mortgage interest rate on outstanding loans has been declining for some time.
A rate rise, or even hints of a rate rise, would see cash flow into the country to take advantage of our already comparatively high rates which would push the dollar even higher. Ah, property Having set the hares racing in Australian real estate five years ago, the RBA now has to perform some delicate dance steps if it wants to avoid a disaster.
However there are still a number of past rogue sales where the banks have taken a larger slice of the risk and which may come to market at some point. It's difficult to find anyone who holds an optimistic view of China in the medium term. That's the last thing the Reserve wants.
RBA cash rate Global concerns mounting While the RBA's post-decision statement maintained a global economic expansion was continuing, it also highlighted growing concerns offshore that could impact Australia. Among the handful who a fortnight ago were predicting a cut this year, almost all have changed their tune and, suddenly, the chances of an official hike before April next year have risen from zero to almost 40 per cent.
The RBA has not changed its setting since August when the cash rate was cut to its current record low. Many of these sales do take several years to unfold, and typically go back on the market for over inflated asking prices, until the financiers pull the plug on the business.
In fact, we've been on a different course for a decade. That pressure will only increase once global rates rise. So, rather than acting ahead of the curve, as it has always done, it now will be forced to wait and somehow play a rear-guard role, to mop up the mess. That's the last thing the Reserve wants.
It worked … sort of. There are a number of rogue sales currently in the market, whereby the purchasers of a quarry, have paid well in excess of the perceived market value. If a purchaser has overpaid for a quarry business, then quite often the return on capital factors through to the selling prices of the products, and often makes them uncompetitive compared to rival operators, and in turn, reduces the outputs and profits until such stage as the quarry business fails.
Many of these rogue sales are easily identified as existing quarry owners tend to quote them, as being comparable to their quarry, at the time of a valuation.
They've become more concerned with "financial stability" than inflation. Don't hold your breath. Regulators finally admit Australia has a property bubble, but is it too late to deflate it without popping it?
But also capitalisation rates for rogue sales have been as low as 6.
If they have to pay more, they will pass those costs on. Queensland was the biggest contributor to the retreat which saw building permits issued fall by more than a third to the lowest level in five years.The Reserve Bank has extended holding interest rates at the emergency low of per cent for a record 21st meeting.
The RBA has not changed its setting since August when the cash rate was. Cash Rate. Monetary policy decisions are expressed in terms of a target for the cash rate, which is the overnight money market interest rate.
A media release is issued at pm after each Reserve Bank Board meeting, with any change in the cash rate target taking effect the following day.
Monetary policy decisions are expressed in terms of a target for the cash rate, which is the overnight money market interest rate. A media release is issued at pm after each Reserve Bank Board meeting, with any change in the cash rate target taking effect the following day.
The chart shows the change in the RBA cash rate overlaid against market expectations for the cash rate looking 18 months ahead. Two things stand out from the chart. Asian shares closed lower on Tuesday, although losses in the region were slighter than the declines seen stateside in the last session amid a drop in tech stocks and trade-related worries.
Like an increasing number of economists, traders, at least based on current market levels, aren’t convinced the Reserve Bank of Australia (RBA) will lift official interest rates until at.Download