SMSF investors wont be happy this week as the proxy income giant Commonwealth Bank share price closed on Friday ($71.44) below the $71.50 retail entitlement price and hit a low of $70.15 before recovering to ~$73 as we write. There are a number of factors driving this sell off including a gloomy economic outlook for the region, increased capital and liquidity requirements (with new regulation to come) and the potential for China to stem capital flows out of the country which has been driving the residential housing markets over the past few years. Markets had a bumpy ride last week but primary issuance continued with relevant new issues from QBE Insurance Group, Auckland Airport, Integrated Packaging (unrated) and Axsess Group (unrated) to name a few. Domestic Interest Rates Markets remain uncertain and volatile in the wake of Janet Yellen’s decision to keep US rates on hold. We think it is unlikely central banks around the globe will be able to raise rates materially anytime soon and the primary driver of this is inflation. On February 3, 10-year bond yields hit an all time low of 2.27%, before lifting to highs near 3.15% on June 11 and now back down around 2.70%. Similarly 3-year bond yields are holding at 1.90 per cent, not far off their recent lows of 1.73 on August 24. But whichever way you look at it, the interest rate markets believe low inflation is here to stay. As at 25 September, the ASX 30 Day Interbank Cash Rate Futures October 2015 contract was trading at 98.015, indicating a 7% expectation of an interest rate decrease to 1.75% at the next RBA Board meeting.