NAB sees interest rates on hold...

Yesterday NAB released it's Global and Australian GDP forecasts, a summary of which is below:

• Global economy slows with softening evident across advanced and emerging economies. Worst risks should be averted and global growth to pick-up slightly in 2013. Australian economy at trend but softening, while confidence helped by Euro-zone comments and lower interest rates. Labour market and orders still soft but activity to hold up sufficiently to circumvent need for further rate cut.

Today the Australian Wage Growth data has been released, summarised below:

• Wages growth at 3.7%yoy a touch higher than expected
• Next quarter could see wages growth at 4% plus
• Consumer Confidence soft but future expectations better
• Caution about further interest rate cuts would seem to be the order of the day at the RBA.

As we have previosuly written current fixed mortgage rates for 1,2 and 3 years are around 5.8% which is below the current discounted standard variable rate for the major lenders, so now might be a reasonable time to fix. The reason for fixing should always be to have certainty of payments rather than trying to beat the bank's variable rate.

If you would like advice about your specific situation please contact us.

The full releases are below:

http://www.medicalfinancial.com.au/images/120814GDPForecasts.pdf

http://www.medicalfinancial.com.au/images/120815WPIandConsconf.pdf