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Which lenders cut fixed rates despite the RBA decision?

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Australian Broker | 12 May 2014, 08:40 AM Agree 0
Lenders are still cutting rates this month left, right and centre in a bid to capture more of the tight market
  • MCC | 12 May 2014, 09:31 AM Agree 0
    Not only a response to competitive market but more to do with uncertain medium term economic outlook for 'growth' - factors include:-
    - dollar still above 90c US
    - current mining peak over & economy transitioning.
    - public sector spending cuts combined with increased taxes
    - 'under employment' double digit (forget about measuring unemployment)
  • Patrick | 12 May 2014, 02:55 PM Agree 0
    Fixed rates are not determined by the RBA, just the cash rate. Fixed rates are determined by Swap Rates set by the money market. There may have been some small expectation of a cash rate rise priced into swap rates and when no change was announced the market corrected and this has been passed on by some lenders, but this is nothing to do with RBA.

    PS MCC, only the mining investment boom is over, the production from increased capacity boom is just beginning. Look at the volume of exports, particularly iron ore. We now have a significant trade surplus and might be heading for a current account surplus. National savings (superannuation) A$1.7 trillion and expected to reach $7 trillion by 2033, so plenty of local capital available. These trends will put upward pressure on A$ and downward pressure on interest rates. RBA policy is still stimulatory, but neutral will now be a cash rate of 4.0% not 5.0% so when rates rise it will not be too bad unless rampant inflation breaks out.
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