Analysts expect margin expansion to underpin a strong first half result as the bank captures the full force of RBA rate rises.
Market participants will also get a good look at how consumers are faring amid the cost of living crisis with JB HiFi, Wesfarmers and Super Retail GroupThe Commonwealth Bank’s cash profit is forecast to jump 11 per cent to $5.4 billion as its net interest margins – the difference between funding costs and what it makes on a loan – expand after it passed on the RBA’s cash rate increases to home loan customers in full but lifted deposit interest rates by smaller amounts.
Markets perceived a hawkish pivot as the board abandoned the pause signalling featured throughout its late-2022 statements, lifting peak rate expectations above 4 per cent. “I agree the ACCC should be looking into this – there seems to be no competition in the term deposit market.More transparencyWith earnings downgrades on the horizon, all eyes will be on Canberra for clues about how RBA governor Lowe is balancing recession risks with getting inflation back to target.
Since then, the 3-year bond rate has drifted higher from 3.1 per cent on Monday to 3.49 by Friday’s close. Peter Morgan, private investor and former Perpetual and 452 Capital money managers, is calling on the RBA to commit to public questioning after rate decisions are announced, similar to the US Federal Reserve.“The market deserves to be fully informed. When you start going down the path of having selective briefings for big players it leaves the whole system open to abuse.”
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