ANZ will pass on full rate cut: Midday roundup

ANZ has become the first of the big banks to cut its lending rates, and will pass on the full 25 basis point cut announced by the Reserve Bank on Tuesday.

ANZ’s new standard variable mortgage rate will be 6.80%, effective next Friday, the bank said today.

The 0.25 percentage point decrease will save customers about $13.50 per week for the average home loan of $280,000, while small businesses will save $6.25 per week for the average business loan of $130,000.

“Funding costs remain elevated as a result of the deteriorating economic situation in Europe and strong competition for deposits,” ANZ chief executive Australia Philip Chronican said in a statement.

ANZ’s move will put pressure on the other banks to pass on the rate cut.

Apple to pay a $2.25 million fine to the ACCC for iPad claims

Apple Australia has agreed to pay a $2.25 million fine to the Australian Consumer and Competition Commission for misleading consumers with its iPad 4G advertising.

The Australian reports that Apple is also set to pay $300,000 to cover the ACCC’s court costs.

When Apple initially released the new iPad in Australia last March it advertised that it iPad was 4G capable, when the device is only compatible with the 700 MHz and 2100 MHz 4G frequencies, not Telstra’s 4G frequency of 1800MHz.

China cuts rates for the first time in four years

The People’s Bank of China announced today that it would cut its one-year deposit and one-year lending rates by 25 basis points each, to 3.25% and 6.31% respectively, effective June 8.

This is China’s first rate cut since the end of 2008.

“Today’s rate cut sends a strong message: Beijing will do whatever it takes to support growth this year,” said Qu Hongbin and Sun Junwei, economists at ANZ.

“Get ready for more aggressive easing to be delivered in the coming months – which should generate a modest rebound of GDP growth to above 8.5% in 2H.”

Stock market opens with little change

The Australian stock market opened flat following a mixed performance on Wall Street overnight after the Federal Reserve indicated there would be no quick stimulus for the faltering US economy.

At the 10.15am AEST official market open, the benchmark S&P/ASX 200 index fell 0.09% to 4,104.9 points, while the broader All Ordinaries Index dropped 0.09% to 4,152.7 points.