Total Australian Credit

$7,478,995,732,840

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AUD

 

Total Australian Credit outstanding includes all debt and equity outstanding of the domestic non-financial sectors.

Total Australian Credit has grown from AU$787.7 billion in December 1989 to AU$6.3 trillion in December 2016; an increase of a little over 800% over a 27 year period.


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RBA very unlikely to move today

 

The primary reason that the RBA will be less inclined to adjust the Cash Rate today is year-ended core Inflation (excluding volatile items) data for December 2016 amounted to 1.3%. This is well below the 2-3% RBA Inflation Target over the Long Run. Outside of this, money markets have been consistently stable for months now and are

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October cash rate cut most unlikely

 

It is no secret that the RBA look at a number of economic indicators when they go to board on the first Tuesday of each month (except January). What is a secret is the decision that they will make in the lead up to Tuesdays 2.30 announcement. The major factors that contribute to the RBA’s

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September rate cut not completely out of question

 

While it is highly unlikely, the RBA could further cut interest rates today when they meet for their decision on monetary policy for the month. In light of the 25 basic point cut last month, the AUD/USD actually increased by almost 1 cent when averaged over the month of August to July. This being counter logical to

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August 2016 cash rate cut is more than likely

 

Key points: -CPI inflation hits a 17 year low -Money markets Overnight Indexed Swaps (OIS) are at new lows -Government bond yields are moving into 1.50% territory -24/25 economists surveyed believe there will be an August Rate cut -As at Friday 29th July, the ASX 30 Day Interbank Cash Rate Futures indicated an August interest rate

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U.S. Federal Reserve breaks bad

 

In the wind up of 2015 the Federal Reserve (FED, U.S. Central Bank) has made a counter logical (logical, in terms of their theoretical mandate) decision to increase interest rates, effectively reducing the amount of liquidity that will be available into 2016. On 17th December 2015 the FED made the decision to raise he Federal Funds

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Australia needs more cash!

 

One of the major changes that has occurred over the past 20 to 30 years, since the days of financial deregulation, is the decline in the percentage of cash (liquid of currency) to bank assets (private debt). See graph 11.1 below: Chart 11.1 This is significant because a ratio of this nature represents our nations ultimate ability to pay

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Interest only mortgage loans under scrutiny by ASIC

 

The Australian Securities and Investment Commission (ASIC) are cracking down on interest only loans in the mortgage market suggesting a portion are at risk of default. This is an important initiative on the behalf of the regulator watchdog as in the mortgage market owner-occupiers mortgages interest only repayments equates to over 25% of the market

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Just in time delivery

 

The decision by the RBA to cut the cash rate by 25 basis points in May has proven quiet effective in stabilising money markets since early May. 3 year CGS yields have normalised to above 2 year CGS yields, though this spread is again narrowing. Meanwhile the RBA is in between a rock and a hard

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Will they cut in May?

 

The 30, 90 and 180 Bank Accepted Bills (BABs) rates dropped to 2.15, 2.17 and 2.25 per cent respectively yesterday (04/05/2015). An increasing amount of economists are siding with the argument for a rate cut. Will the RBA pull the trigger at 2.30pm today? Or, will they play devil advocate?

Even more signals for lower interest rates

 

The spread on 3 year Commonwealth Government Securities (CGS) and 2 year CGS has widened to 5 basis points; 1.82 per cent and 1.87 percent respectively as at 20th April 2015. This indicates that fund managers prefer 3 year bonds to 2 year bonds as they foresee the cash rate being lower for longer on the

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