Australia May Not Raise Interest Rate

吉姆.Shaw

Australia May Not Raise Interest Rate, Economists Say (Update2)

By Hans van Leeuwen

Australian economists and traders have lowered their expectations the central bank will raise interest rates next month, judging Governor Glenn Stevens is less concerned with inflation after he left borrowing costs unchanged yesterday.

Just six of 22 economists surveyed today by Bloomberg News now predict a quarter-point rate increase to 6.5 percent when the Reserve Bank of Australia next announces a decision on May 2, down from 15 of 25 surveyed on April 23. The median probability of an increase has dropped from 50 percent to 40 percent.

Futures traders have cut the chance of a May increase from 50 percent to 46 percent, according to a Credit Suisse index, as they await an inflation report on April 24 that could make or break the case for higher interest rates. Traders had bet on an April move after retail sales jumped and a Reserve Bank official in March said inflation is likely to remain ``too high.''

``It's still a fairly balanced decision,'' said Brian Redican, senior economist at Macquarie Bank Ltd. in Sydney. ``The bank did lower its inflation forecast in February and the outlook for inflation hasn't changed much since then.

``We're at the mercy of the upcoming inflation numbers.''

The yield on the May 30-day interbank futures contract has fallen to 6.36 percent at 4:30 p.m. today in Sydney, a drop of 10 basis points, or 0.1 percentage point, since the Reserve Bank announced its decision in Sydney yesterday. That implies only a 44 percent probability of a rate increase.

The yield on the June 90-day bank bill contract has also fallen 10 basis points since yesterday to 6.55 percent. By contrast, the Australian dollar is still close to a 10-year high, trading at 81.67 U.S. cents at 4:31 p.m. in Sydney.

Annual Inflation

The Reserve Bank raised borrowing costs three times last year, taking the rate to a six-year-high 6.25 percent.

Annual inflation has breached the bank's target of between 2 percent and 3 percent for three straight quarters, though the rate cooled to 3.3 percent in the fourth quarter from 3.9 percent in the previous three months.

The Reserve Bank in February lowered its forecast for 2007 underlying inflation, which strips out volatile price movements, to 2.75 percent from a 3 percent prediction in November. The rate was 2.9 percent at the end of 2006.

Still, the outlook for underlying inflation is ``higher than ideal,'' the bank's Assistant Governor Malcolm Edey said in a speech on March 16. ``It implies that inflation is more likely to be too high than too low in the period we can foresee.''

That speech, together with reports showing a home-building recovery, jobs growth and rising retail sales, sent the Australian dollar to a decade high and had futures traders pricing the chance of an April rate increase as high as 67 percent.

`Shake-Up'

Edey probably intended to ``give the market a shake-up, because they had previously been pricing in rate cuts,'' said Macquarie's Redican.

Because the Reserve Bank didn't back up Edey's speech with a rate increase this week, ``people will take messages from the Reserve Bank with a little bit more of a grain of salt unless they come from Governor Glenn Stevens himself,'' Redican said.

The Reserve Bank does not release an explanatory statement when borrowing costs are left unchanged.

Following are the economists' forecasts for the overnight cash rate target when the Reserve Bank next announces a decision on May 2 and the probability of an increase on that date. The table also shows their estimates for the rate at Sept. 30 and Dec. 31 this year:



Rate by End of:        May  Probability  3rd-Qtr 4th-Qtr
                            of increase
--------------------------------------------------------
Median                6.25%    40%        6.25%   6.25%
High Forecast         6.50%    75%        6.50%   6.75%
Low Forecast          6.25%    25%        6.25%   6.00%
No. of replies         22      22          22       22
-------------------------------------------=------------
4Cast                 6.25%    40%        6.25%   6.50%
ABN Amro              6.25%    35%        6.25%   6.25%
AMP Capital           6.25%    40%        6.25%   6.00%
ANZ Bank              6.50%    60%        6.50%   6.75%
Ausbil Dexia          6.50%    60%        6.50%   6.50%
Barclays Capital      6.25%    40%        6.25%   6.25%
BT Financial          6.25%    31%        6.25%   6.25%
Citigroup Australia   6.50%    60%        6.50%   6.50%
Commonwealth Bank     6.25%    35%        6.25%   6.25%
Deutsche Bank         6.25%    40%        6.50%   6.50%
Goldman Sachs         6.25%    40%        6.25%   6.00%
Grange Securities     6.50%    70%        6.50%   6.50%
HSBC Australia        6.25%    40%        6.25%   6.25%
ICAP Australia        6.25%    30%        6.25%   6.25%
JPMorgan Chase        6.25%    30%        6.25%   6.25%
Macquarie Bank        6.25%    35%        6.25%   6.25%
National Australia    6.25%    30%        6.25%   6.25%
Nomura Australia      6.25%    40%        6.25%   6.25%
St.George Bank        6.25%    25%        6.25%   6.25%
Suncorp               6.25%    45%        6.25%   6.25%
TD Securities         6.50%    55%        6.50%   6.50%
Westpac Bank          6.50%    75%        6.50%   6.50%
=========================================================

villa

原帖由 吉姆.Shaw 于 2007-4-6 14:56 发表
Australia May Not Raise Interest Rate, Economists Say (Update2)

By Hans van Leeuwen

Australian economists and traders have lowered their expectations the central bank will raise interest rat ...

谢谢吉姆转贴。这澳洲的息口未来走势，前天有大半的专家学者各类牛人猜错了，这一下看来又得猜猜猜了~~~:si34

chenzy0513

Good stuff. Thanks