News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • USD Ascending Triangle, Bullish for Q4 - #DXY chart on @TradingView
  • Credit rating agency Standard & Poor's is due to give its sovereign credit rating update on Germany today ahead of weekend national elections
  • RT @BIS_org: Since the early 1990s, changes in the #MonetaryPolicy stance have affected a rather narrow set of prices – mostly in the servi…
  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
  • Kansas City Fed President Esther George says: - The labor market friction is fading barring a resurgence of virus - A 'normal' economy is likely to remain elusive for some time - Asset buying effects complicate the judging rate change plan
  • The risk rally that charged the S&P 500 and brethren post-FOMC has stalled into Friday's open. DailyFX's @JohnKicklighter discusses what is driving markets post Fed👇
  • 🇺🇸 New Home Sales MoM (AUG) Actual: 1.5% Previous: 6.4%
  • China has announced that they will be cracking down on Cryptocurrency mining and while this has been a reoccurring theme, regardless of that fact Get your market update from @JMcQueenFX here:
Pressure Builds on RBA Rate Cut after Mortgage Rate Hikes and Dovish ECB

Pressure Builds on RBA Rate Cut after Mortgage Rate Hikes and Dovish ECB

Nathalie Huynh,

Talking Points:

  • Three out of four largest banks hiked variable mortgage rate: Westpac, CBA, NAB
  • These signaled a tightening of financial conditions, contributing to expectation for dovish RBA
  • Equities and risk assets rallied on this, in addition to ECB spillover effects

Australian dollar stayed weak and risk assets rallied in the morning. Apart from the spillover effects from a dovish ECB that led to expectations for easing by other central banks, local news today focused on another mortgage rate hike by National Australia Bank.

Variable mortgage rate by NAB rose 0.17%, after a 0.15% hike by Commonwealth Bank of Australia yesterday, and 0.2% hike by Westpac Bank last week. The banks cited rising costs of lending due to new capital regulations. The big four banks of Australia hold around 80 percent of the home loan markets.

With a swelling property market similar to its neighbor New Zealand, mortgage payment is one of the popular expenses of local households and that filters to considerations affecting monetary policy by the Reserve Bank of Australia, i.e. its rate decision.

The almost unanimous rate hike by the big three banks is perceived as a signal of tightening financial conditions, or a shortage of funds to lend. This added to ECB’s dovish tone overnight to fuel speculations that the Reserve Bank will need to compensate with a rate cut soon. RBA will meet on November 3 and December 1.

The graph below displays projection of future interest rate in the country, with each line representing expectation on a particular day. Projected interest rate has lowered after each of the rate hike: today, 2 days ago, and October 14.

Pressure Builds on RBA Rate Cut after Mortgage Rate Hikes and Dovish ECB

AUD OIS today, 2 days ago and 1 week ago. Source: Bloomberg

Australian dollar tumbled 0.7 percent yesterday after CBA announced a rate hike, although the effect of NAB’s hike today drowned down amid spillover effect of European Central Bank’s meeting overnight.

In contrast to AUD’s weakness, equities and risk assets rose in Australia in anticipation of further RBA easing. The ASX tested 61.8% Fibonacci at 5361, as shown in ASX 200 chart below.

Pressure Builds on RBA Rate Cut after Mortgage Rate Hikes and Dovish ECB

Daily Chart - Created Using FXCM Marketscope

Market now speculates that Australia and New Zealand Banking Corporation will also hike mortgage rate soon.

--- Written by Nathalie Huynh, Currency Strategist for

Contact and follow Nathalie on Twitter: @nathuynh

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.