november/december interest rate thread, 2nd poll

In november and december meeting the RBA will set interest rates at:

  • no increase (stayat 3.25%)

    Votes: 13 14.1%
  • increase by 0.25%

    Votes: 51 55.4%
  • total increase by 0.5%

    Votes: 21 22.8%
  • total increase by 0.75%

    Votes: 6 6.5%
  • more then 0.75% for november and december

    Votes: 1 1.1%

  • Total voters
    92
  • Poll closed .
Well, what a week!
we started with good retail sales,
then with bad trade deficit numbers
then with RBA lifting rates
Now seems with today unemployment number the week is over for big Australian news.
I think the poll I launched last week definetly need to be repeated to include the latest news.
 
before todays figures id have penciled in another 0.25% before xmas, but with unemployment etc down, im looking at 0.5% total by end of year
 
Todays unemployment figures, along with yesterdays huge jump in investor housing finance commitments, mean a rate rise next month is almost certain. What a difference two days of news can make!
 
Todays unemployment figures, along with yesterdays huge jump in investor housing finance commitments, mean a rate rise next month is almost certain. What a difference two days of news can make!

The Jump in investor finance is a neutral news as barely compensate the drop in home owner finance. you can check the chart of total home financing that is not going anywhere. Much better the news of retail sales and specially the unemployment numbers that cought the market by surprise (including myself)
 
The Jump in investor finance is a neutral news as barely compensate the drop in home owner finance. you can check the chart of total home financing that is not going anywhere.

Many people said that when the FHB boost subsided we would see a large overall drop in demand. Many people said that investors would not return to the market. The fact that investor finance rose so much that it caused total finance to rise is a positive sign. If investor finance had not jumped by so much then total finance would be down and this may have made the RBA less likely to raise rates (had the unemployment figures not been a factor that is).

Much better the news of retail sales and specially the unemployment numbers that cought the market by surprise (including myself)

Agreed.
 
Yes,

The figures say it all......what do you think, Evan?

I voted for another rate rise.

I must admit, I was suprised unemployment was down.

In Surveying, -we are also advertising for another employee and have taken on another field hand.:) Flat chat.

Regards Jo
 
The unemployment figure is misleading. As explained last night on ABC news the total hours worked are way down. Its just that they are counting part time jobs in the same count as full time jobs.

Re interest rates, i wouldbe surprised to see a couple more .25 rises in a row. I voted for 0.5% but maybe could be 0.75% by early next year.

Its all a bit of a minetsrone at the moment with facts and figures coming from everywhere (only half accurate) and can be used by anyone to support their current beleif bias on the economy and property prices.
 
If things keep going the way they are I think there will be another 0.5% increases via one 025% increase in Nov. and another in Dec.

Even at these rates money is cheap.

The reserve will avoid doing 0.5% increases...but they will increase in 0.25% consistently over the next 6 months or so before pausing....to see the impact. At that rate we would hit 4.5% by about May 2009...with a variable rate of around 6.6%. Still cheap by most standards.
 
The unemployment figure is misleading. As explained last night on ABC news the total hours worked are way down.
I didn't see that. Hours worked is up by 0.9% on last month, and down 2% on this time last year - hardly 'way down'.

Its all a bit of a minetsrone at the moment
Pretty clear to me....
  • Business confidence up (strongest since Oct 2003)
  • Consumer confidence up (biggest 4 month surge in 35 yrs)
  • Car sales up (1st time 15 months)
  • Housing finance up (espec investor finance)
  • Bond yields up
  • Stock market up
  • Retail sales up
  • Job ads up
  • GDP forecasts upgraded
  • Unemployment expectations down (1st time
  • even unemployment plateauing
  • and house prices rising too :)

I can't think of any leading indicators that aren't looking stronger than at any time in the last 12 months.


.... with facts and figures coming from everywhere (only half accurate)....
Which ones do you feel aren't accurate ?

....and can be used by anyone to support their current belief bias on the economy and property prices.
Agreed :rolleyes:.



If things keep going the way they are I think there will be another 0.5% increases via one 025% increase in Nov. and another in Dec.
Agreed, and another +0.25 in Feb & probably March. The smart guys think so anyway - they put 100% chance of a rise in Nov & Dec & Feb, and a high probability in March & April.



The reserve will avoid doing 0.5% increases...but they will increase in 0.25% consistently over the next 6 months or so before pausing....to see the impact. At that rate we would hit 4.5% by about May 2009...with a variable rate of around 6.6%. Still cheap by most standards.
Some commentators feel there's a possibility that raising rates won't suppress demand but have the reverse effect. If the RBA is telling us the crisis is over then let's all stop saving & start spending up big.
 

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Looks not much different then 15 months ago, we all know what happened 2 months later...
I disagree....

Business confidence is now strongest since Oct 2003
Consumer confidence has just had biggest 4 month surge in 35 yrs
Bond yields were pointing to tough times
Job ads were down 15 months ago
House prices weren't rising much then
 
I disagree....

Business confidence is now strongest since Oct 2003
Consumer confidence has just had biggest 4 month surge in 35 yrs
Bond yields were pointing to tough times
Job ads were down 15 months ago
House prices weren't rising much then

I don't give much importance of confidence as it hasn't got a a long term impact, what is the difference of confidence high now where future looks much better for business and consumer, then 15 or more months ago when things were good and was business as usual?
I don't know what do you mean with jobs ads?
here is the job ads news:
The number of jobs advertised in newspapers and on the internet rose 4.4 per cent in September, a survey from ANZ published today said.

It was the strongest pace of increase since December 2007 and followed a 4.1 per cent improvement in August.

Job ads had declined for 15 straight months between May 2008 and July this year.
...
But despite the recent pickup, Mr Hogan said total job ads "remain at low levels'', given they were still 44.9 per cent lower than at the same time last year.
But job ads is just data that comes few day earlier then unemployment so it is a leading indicator, unemployment data is much better data to analise, so we have unemployment that might stabilise much earlier then forecast, 15 or more months ago we had a very strong employment and skills shortage...
about bonds I don't know what you mean, yields are not going up, on the 10 year term they are going down for the last few months, for the 3 year term they are stable.
3ytreasurybonds.png
10ytreasuryyield.png
About home price data what was the y/y home price growth in July 2008? what is the Y/y growth rate now?
but more importantly, debt growth is very similar now then 15+ months ago, the main difference I see is the gov budget balance that was positive then and negative now, and business that found easier to borrow then then now.
 
My personal feel is 0.25% in Nov, with a hold in Dec (though that depends on if the dials suggest they need to maintain increased consumer sentiment)
Further rises (0.25%) for Feb/Mar and likely beyond to work toward a more historic average.
Regardless it was good while it lasted :)
 
I don't give much importance of confidence as it hasn't got a a long term impact,
I thought this thread was about what will happen to IRs in 3 weeks & 8 weeks time..... the short term impact of confidence is v. relevant IMO.

I don't know what do you mean with jobs ads?
ANZ job ad series. There's plenty of posts on SS about it - it's a good leading indicator of what will happen to employment 6 months hence.

But job ads is just data that comes few day earlier then unemployment so it is a leading indicator, unemployment data is much better data to analise, so we have unemployment that might stabilise much earlier then forecast, 15 or more months ago we had a very strong employment and skills shortage...
Jobs data is volatile - last month was -35K, this month is +40K. It's better to look at the trend, than individual months. The point is that unemployment is likely to stop increasing & also likely trend down.

about bonds I don't know what you mean, yields are not going up, on the 10 year term they are going down for the last few months, for the 3 year term they are stable.
Yields are far higher than they were 15 months ago.. as your charts show.

About home price data what was the y/y home price growth in July 2008? what is the Y/y growth rate now?
The quarterly figures look good - better than most for the last 5 yrs.

The point I'm making is that IRs currently at 40 yr low and all the above indicators looking either positive or v. positive, IRs must rise quickly.... probably in Nov & Dec & early 2010.

but more importantly, debt growth is very similar now then 15+ months ago,
Yep, and roughly the same as the previous 15+ yrs.

the main difference I see is the gov budget balance that was positive then and negative now, and business that found easier to borrow then then now.
Govt budget balance is not excessive, it's expected to be larger after tough times - I don't think it's especially relevant to the short term.
 
Looks not much different then 15 months ago, we all know what happened 2 months later...
Boz all one has to make an assessment is future indicators.
Suggesting that another exogenous shock is on the cards merely because forward indicators in 2007 were also positive is naive.
 
keithj,
I don't understand what r u trying to say....
r u saying that now is different (better?) then in the last few years? and that home prices are going to go up more then in the last previous years? and that explain the tightening of rates?
 
Boz all one has to make an assessment is future indicators.
Suggesting that another exogenous shock is on the cards merely because forward indicators in 2007 were also positive is naive.

I like your answer chilliaa,
I am suggesting that risks are high and leveraging is not the way to go. the best way in my opinion is to put your savings in a safe place and go back to work (stop dreaming about equity fairy and similar stuff)...
 
I like your answer chilliaa,
I am suggesting that risks are high and leveraging is not the way to go. the best way in my opinion is to put your savings in a safe place and go back to work (stop dreaming about equity fairy and similar stuff)...

No offence, but aren't you always saying that in relation to property as an investment (well since you've been on SS anyway)? How many of the stars need to be aligned before you'll look at property?
 
No offence, but aren't you always saying that in relation to property as an investment (well since you've been on SS anyway)? How many of the stars need to be aligned before you'll look at property?

Yes, I've probably beeing boring with that...
anyway, IF you have a good knowledge of the property industry and IF you have a good amount of money aside I am sure there is lots of way to make money with property even in these years and this market.
For example if you have 1m$ it is probably a good option to invest them to buy a property then develop/renovate or whatever to add value (a bit like MWhite does). Probably if you have not much money like 50k or 100k$ I would put them in my own residence and forget about investing
 
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