RBA Decision 3 May 2016

Forget city, think NAB customers.

 

Banks pass on rate cut in full | smh.com.au

CBA, Westpac & BOQ joined in

 

Think of the cash flow!!

 

The RBAs decision is a bit surprising. In the context of the lending environment it makes little sense, but given broader economic picture I guess there is an argument for it. The banks passing on the rate cut in full is even more surprising however. In many respect this will only serve to fuel interest in the property market which will lead to further increases - exactly the opposite of what the regulators want.

In practical terms it improves peoples cash flow, but with the exception of only a minority of lenders it doesn't change peoples borrowing capacity as the floor rates have already been truely passed.

I suspect that having passed on the rate cuts in full to their standard variable rates, the banks will reduce the discounting they're currently negotiating. There's more than one way the banks can not pass on a rate cut.

What will also be interesting is how the fixed rates move over the next few weeks. If the markets agree with the RBAs decision, then they may also reduce a little.

 

Yes. It will be interesting if fixed rates drop a little. I doubt it will be much if anything..also they could cut a bit of business banking rates..with a bit personal home lending var/fixed...yeah a few different ways to cut it.

 

Jeez how far behind is ANZ now falling in terms of competitive rates...? I feel a bit unlucky as the guy who doubled down on them as my main lender.

 

Nicely timed for my interest in advance loans come June 30th.

 

Agreed Re IIA rates! Hoping by end of next week to see some downward movement on advertised fixed rates!

 

For those interested in this chart, @MarkB will be proud of me

chart from Goldman Sachs does, we can see that financial conditions are tighter now than at any time in the past four years, including the last four rate cuts.

 

Dam. I was very sure it would go down. I didn't think of betting on it.

 

Can anyone bring up the current and recent historical yield curve on long term (up to 5years) BBSY/BBSW rates?

Cheers

Blacky

 

I bet against it! I can't complain too such since I get lower interest rates anyway I suppose.

 

I was very surprised the RBA acted yesterday. The door's wide open for another cut around August..

"No change" for June is $1.10 at the moment.

 

I caught 3 seconds of a news article that mentioned deflation and I immediately thought that interest rates would go down.

 

I suspected the same data made a cut inevitable, but very surprised the RBA acted immediately. I get the impression they're prepared to do it again within a few months if one isn't enough.

 

I'm sure the RBA has all of our interests at heart but I think they don't want to get caught with there pants down. If the next Inflation figure was a shocker and they had done nothing they'd have looked pretty silly .

 

All (well, a lot... ok, a bit.... maybe) will be revealed tomorrow.

Coming Up
Statement on Monetary Policy
6 May 2016, 11.30 am AEST