Client note released today
- RBA won't "mechanically" offset mortgage-rate increases if major local banks follow Westpac's lead
- central bank has already factored in 10-15 bps for the cost of funds and was expecting some price adjustment
- other large lenders may increase rates by less than the 20bps that Westpac have announced
- Barclays maintains its base case for RBA on hold throughout 2016, though it acknowledges China uncertainty and Westpac's move raise the risk of a cut
Eamonn had this on Westpac's rate hike and I followed up with this from Goldmans who added another RBA rate cut to their 2016 forecast
Meanwhile is in retreat at 0.7317 after 0.7350 proved a step too far