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August rate cut?

Discussion in 'Property Finance' started by Dean Collins, 11th Jun, 2016.

  1. Dean Collins

    Dean Collins Well-Known Member

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    Anyone think that the August RBA rate cut will or wont happen and are you holding off from buying today in order to take advantage of the 0.25% cut being proposed?

    August rate cut still likely: Westpac's Bill Evans

    How much do you think this will drop 5 year fixed rates? The banks are unlikely to cut a full 0.25% for fixed rates but wondering if I hold hold off on the next IP for another 8 weeks.
     
  2. markson

    markson Well-Known Member

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    I think they will cut it. But the banks won't pass it on. That's why the banks were so quick to pass this one.
     
  3. ZachAnsel

    ZachAnsel Well-Known Member

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    They will have better view to decide in Sept/Oct, my bet they won't cut 0.25 in July/August
     
  4. Redom

    Redom Mortgage Broker Business Member

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    Plenty of data to come out between now and than that will impact predictions and likelihood.

    Also there may be further regulator induced rate rises later this year too - partly offsetting any changes to RBA cash rate.
     
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  5. MTR

    MTR Well-Known Member Premium Member

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    Hi Redom
    What are your thoughts? you probably have a better idea than most.

    One thing I do know is if the interest rate drops the Au$ will fall, currently at 75 which is a worry for RBA, this will be one consideration with regards to dropping the IR.

    MTR:)
     
  6. Redom

    Redom Mortgage Broker Business Member

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    I'd only be guesstimating @MTR - with current data i'd agree there's likely to be one more cut later this year. I don't think they'll be cutting again without much more additional data though.

    Its a mixed bag at the moment - decent growth data, strong employment numbers but very low inflation figures. If there's some positive news on inflation that adjusts their expectations, i'd imagine they'd hold still at this rate for the rest of the year. APRA changes do give them the comfort of cutting again knowing that it won't have too much of a negative consequence on financial stability.

    For homeowners and investors, I wouldn't be surprised if there is an out of cycle rate rise by lenders too - justified by increased capital requirements reducing their ROI, and passing that rate increase onto consumers. A cost of additional safety to the financial system.
     
  7. MTR

    MTR Well-Known Member Premium Member

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    I agree, I don't think we will see an IR drop.
    However, I also think the data is lagging behind, what we are seeing today is not the full/real picture.
     
    Dean Collins likes this.