ASIC releases follow-up term deposit report

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ASIC last week released a report that highlights improved industry practice and better outcomes for investors in relation to the automatic rollover of term deposits. The report reveals that consumer outcomes on rollovers of term deposits have improved by billions of dollars.  ASIC Report 353: Further review of term deposits (REP 353) follows an earlier review and

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Low inflation keeps door open for rate cut

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The TD Securities-Melbourne Institute monthly inflation gauge rose by 0.2 per cent in September after lifting by 0.6 per cent in August. Excluding volatile items, the inflation gauge was unchanged in September. On all measures, annual inflation is around 2.3-2.4 per cent. The Performance of Manufacturing index fell by 1.2 points to 44.1 in September.

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Budget on track despite record monthly shortfall

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The federal budget was in deficit by $43.7 billion in 2011/12 or 3.0 per cent of GDP. At the time of the May 2012 budget the government projected a deficit of $44.4 billion. Government handouts to families and seniors contributed to a record monthly budget deficit of $14.4 billion in June. Receipts from the goods

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Principal Global Investors 2012 Central Bank Watch

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Principal Global Investors’ today released their monthly Central Bank Watch which evaluates the Reserve Bank of Australia’s current and expected interest rate policy. The report refers to the Reserve Bank of Australia’s (RBA) anticipated decision to keep the cash rate on hold with expected growth to remain close to trend and inflation to remain consistent

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Preference for bank deposits hits 38-year high

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The Westpac/Melbourne Institute index of consumer confidence rose by 1.6 per cent in September to a reading of 98.2. Sentiment levels are up 1.3 per cent on a year ago. The majority of Aussies believe that the wisest place for savings is in the bank (39.0 per cent of respondents) – the highest level in

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Reserve Bank holds fire… for now

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The Reserve Bank Board has left the official cash rate at 3.50 per cent for the third straight month. The variable housing rate is applying modest stimulus to the economy at present at 6.85 per cent, below the 15-year average of 7.20 per cent. The next RBA Board meeting is on October 2 2012. The

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Cash love affair heading for heartbreak

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Investors’ continuing love affair with cash could be leading them towards heartbreak if they don’t diversify, says David Bryant, head of Australian Unity Investments.  “While all available research shows that investors have been focused on cash as the best safe haven to protect capital, falling interest rates are making such a strategy increasingly unsound.  “Having

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Reserve Bank happy to sit on the sidelines

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The Reserve Bank has released minutes of the Board meeting held on August 7. Overall it is clear that the Reserve Bank is currently happy with interest rate settings. Inflation remains consistent with the 2-3 per cent target, economic growth is close to trend and financial conditions had eased following recent rate cuts. In short,

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Oliver’s Insights: The search for yield

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Assets with a decent and sustainable yield are attractive because they provide a greater certainty of return in an environment of volatile and constrained capital growth. However, bank term deposit rates have fallen and are likely to fall further, possibly to around 4%, as the RBA continues to reduce the cash rate to help the

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SMSFs turning to trend-bucking term deposits as cash hubs

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SMSF trustees are increasingly turning to term deposits to maximise their returns on cash holdings, taking advantage of interest rates that remain very attractive despite the falling cash rate. Tim Hewson, Investments Manager, RaboDirect Australia and New Zealand said: “Term deposits are increasingly becoming a key part of SMSF strategies. This is largely due to

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