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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“40% of outstanding housing credit (including one major bank) had announced increases in mortgage lending rates” is out of date as two more majors have since lifted their mortgage rates.”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 7 ½% 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).”

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