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1.23am EDT
01:23Rudd: Morrison out of his depth
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1.10am EDT
01:10Kevin Rudd addresses French tensions
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12.10am EDT
00:10Verry Elleegant wins Melbourne Cup
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11.33pm EDT
23:33RBA holds official cash rate at 0.1%
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10.25pm EDT
22:25Albanese says Morrison is ‘gaslighting’ Macron
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9.43pm EDT
21:43Interest rates in spotlight at today’s RBA meeting
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9.31pm EDT
21:31Tim Smith told not to run for re-election by Vic Liberal leader
1.54am EDT
01:54
Philip Lowe, governor of the RBA, has been holding a webinar to explain the board’s decisions at its monthly board meeting today.
The central bank chief has made it clear the RBA is not about to lift its cash target rate, dismissing market predictions of a rise as soon as next March “as a complete overreaction to the recent inflation data”.
That refers to the CPI data for the September quarter that came in at 3% for the headline rate, and 2.1% for the underlying rate.
“Given our forecasts it’s still entirely plausible that the first increase in the cash rate will not be before the maturity of the current target bond [with a maturity date of April 2024],” Lowe said.
It is also now plausible that a lift in the cash rate would be appropriate in 2023.
In our central scenario, underlying inflation reaches the midpoint of the 2%-3% range only in late [20]23.
Wage rises had not been in the 2%-3% range for about a decade, and “things would have to change dramatically” for the bank to revise its view.
“We really want to be sure we can deliver this 2.5% rate of inflation” before the RBA acts, he said, adding the bank does not have a specific target for wage growth itself.
One reason for caution is that the Covid pandemic might not have finished in terms of its ability to throw the economy off track.
“One source of such a shock would be a new strain of the virus or a decline in vaccine effectiveness,” Lowe said.
In this case, the cash rate would need to remain at its current level for longer than otherwise.
Lowe added that today’s meeting was focused on the decision to drop its yield curve control for the 2024 bond, and it did not discuss the housing market “in any detail”, he said.
“At the moment, I don’t have any concerns about the deterioration in lending standards” for home loans, Lowe said.
Updated
at 1.59am EDT
12.51am EDT
00:51
After the RBA’s statement, the dollar fell against the US currency and the stockmarket rose as investors were relieved the central bank was not more aggressive in its comments about the outlook for inflation and the potential for an early rise in interest rates.
Maxime Darmet, the director, economics at Fitch Ratings, said “it’s really like the first step we think towards the normalisation of [Australia’s] monetary policy settings, which had been very loose since the pandemic”.
Darmet said the indications the bank would wait until as late as the end of 2023 to be sure inflation would remain in the 2-3% target range was “not a big change” from previous comments about waiting until 2024.
However, he said should the recovery remain strong we could expect more adjustments sooner than the RBA forecast.
“It’s very possible that in the next meeting they would think it would be 2022,” he said.
The RBA had been relatively “dovish” in its signalling that it was not worried about inflation. However, it also couldn’t be seen to be too slow either in responding as central banks in the US, Canada and soon the UK prepare to wind back support for the economy.
“You’re seeing so much pressure on prices at a global level with energy prices spiking, with supply bottlenecks persisting and so on,” Darmet said. “It’s a very dovish central bank but starting gradually to come around to the new reality that inflation is going to be probably higher than they expected.”
While mortgage holders can take some relief from today’s RBA comments that an interest rate rise isn’t around the corner, Australia and other nations have allowed housing prices to rise too far too fast for the overall health of the economy, not to mention housing affordability for those not in the market.
“Low interest rates are the main channel through which people are taking on more debt,” Darmet said.”[It] can become a concern in terms of not only affordability for low-income households, but also it creates a lot of potential financial instability and risk.
“And this is something many central banks are not taking too seriously,” the Fitch analyst said.
Updated
at 12.59am EDT
12.33am EDT
00:33
Western Australia police are getting closer to identifying every single person who was in the area when Cleo Smith disappeared, and have said they believe an “opportunistic” abductor kidnapped her.
The acting police commissioner, Col Blanch, was on ABC Radio earlier today, and said police were getting closer:
And we’ve tracked down people that we didn’t know, we’ve found them and we have eliminated them, and that’s our focus at the moment – eliminate as many people as possible.
Blanch continued, saying extensive forensic work was under way to map out every inch of the area:
Now we’re in a stage where we need to forensically go over that ground inch by inch to see what disturbances might be in nearby areas for any sort of evidence which might give an inkling as to what happened.
It could be tyre tracks, it could be the sleeping bag, it could be anything.
Blanch said that there were many ways in and out of the camping area Cleo was taken from, but conceded that hopes were not high:
It is difficult to keep the hope up, there is no doubt about it, the longer it goes, but I know those investigators are still focused absolutely on this case trying to bring Cleo home.
This has absolutely hit the heart of everyone in Western Australia, the Australian community, it’s gone international.
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at 1.03am EDT
12.10am EDT
00:10
Verry Elleegant wins Melbourne Cup
Verry Elleegant has won the race over favourite Incentivise. You can read all the updates at our live blog:
Updated
at 12.14am EDT
11.45pm EDT
23:45
As expected the Reserve Bank of Australia has left the official cash rate target unchanged at its record low annual rate of 0.1%.
The focus of the markets and pundits alike, though, has been on the language of the accompanying statement by the RBA governor, Philip Lowe.
As expected, the recent pickup in the consumer price index has given the central bank cause to bring forward its prediction that the underlying inflation will only be “sustainably” within its 2-3% target range by 2024.
While emphasising that it remains “prepared to be patient” with rising prices, the RBA’s “central forecast” is now for underlying inflation “to be no higher than 2.5% at the end of 2023 and for only a gradual increase in wages growth”, Lowe said.
Not a huge change but one the markets will focus on.
“The Delta outbreak caused hours worked in Australia to fall sharply, but a bounce-back is now under way,” he said. “The central forecast is for the unemployment rate to trend lower over the next couple of years, reaching 4.25% at the end of 2022 and 4% at the end of 2023.”
The encouraging comments about the economy will likely mean interest rates rise sooner than that 2024 scenario previously stated by the bank.
No wonder people have been rushing to lock in fixed-rate mortgages even as those too start to come with higher rates attached.
Markets, too, will focus on the RBA’s decision to ditch its yield control curve, or the measure used to keep the yield on the benchmark bond due in April 2024 to 10 basis points, or 0.1%. That confirmation matches what traders had seen in the market for the past few days with no RBA buying to keep that yield down.
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at 11.54pm EDT
10.56pm EDT
22:56
So earlier today, the NSW premier, Dominic Perrottet, was asked about work from home rules, confirming that the government will continue to advise employers to allow employees to work from home until 1 December.
After that, however, it appears it will come down to employers’ discretion.
Perrottet indicated the government would provide advice from there, but didn’t say what that would look like:
It’s under review.
You’d have to say that people have voted with their feet – they’re staying at home anyway.
We’re looking at that and we’ll see how it goes over the next couple of weeks.
Updated
at 11.03pm EDT
10.30pm EDT
22:30
NSW police have provided an update on the police operation under way in Gladesville, saying a man has been arrested.
Police released a statement, saying they attended to a call from Punt Road, Gladesville, following reports of a domestic violence incident.
When officers arrived, a 38-year-old man – armed with two knives – allegedly attacked a 26-year-old male probationary constable.
The injured officer – attached to Ryde police area command – suffered lacerations to the back of his head and a dislocated shoulder.
He has been taken to Royal North Shore hospital for treatment to non-life-threatening injuries.
Officers attached to Ryde police area command attended and, with the assistance of the tactical operations unit, police negotiators and other specialist commands, arrested a 38-year-old man without incident a short time later.
He has been taken to Ryde police station where he is assisting police with inquiries.
Updated
at 10.45pm EDT
10.25pm EDT
22:25
Albanese says Morrison is ‘gaslighting’ Macron
The federal opposition leader, Anthony Albanese, has accused Scott Morrison of “gaslighting and backgrounding” against the French president, Emmanuel Macron.
Albanese told reporters the PM was using Australia as a “human shield” in his attempts to hit back at Macron, who accused him of lying with regards to the submarine deal.
The attempt at damage control by selectively leaking private text messages is quite an extraordinary step for an Australian prime minister to take.
The leaking of this text message is a considerable escalation of the conflict.
Diplomacy requires trust and it requires sombre engagement between leaders.
Updated
at 10.31pm EDT
