RBA Minutes: Next move is up for the cash rate - TDS

The RBA minutes generated two useful headlines relating to the economic benefit of a lower dollar and confirming that the next move is up for the cash rate (its omission in July was market-moving), notes the research team at TD Securities.

Key Quotes

“The observation that "40% of outstanding housing credit (including one major bank) had announced increases in mortgage lending rates" is out of date as two more majors have since lifted their mortgage rates.”

“Secondly, a housing theme we've been highlighting for some time, where "owner-occupier housing credit had been growing relatively strongly at around 7½% annualised over the preceding six months, whereas growth in lending to investors had slowed noticeably". Owner-occupiers are taking advantage of lower prices now that investors have been pushed out by macro regulations.”

“Thirdly, the higher USD wasn't good for "fragile EM economies" ... but "the modest depreciation of the AUD was helpful for domestic economic growth".”

“The August GDP and CPI projections were based on AUD of $US0.74 and TWI of 64, currently $US0.717 and 61.7 respectively, creating upside for growth and tradable inflation (40% of total).”