Fixed income instruments come in many different forms, with the most commonly seen in Australia being bonds. The variable and bespoke nature of bonds (by virtue of being traded over-the-counter) implies a great deal of flexibility in terms of seniority, security and income structure. The two most common types of bond payments seen in fixed income markets are fixed rate [...]
In what was an eventful month for commentary surrounding the state of the Australian economy, the Reserve Bank of Australia (RBA) released its bi-annual Financial Stability Review. In its review, the RBA noted a supportive global economic environment for growth, however, the central bank cited elevated levels of household debt and ongoing trade tensions as key risks to both the [...]
Credit rating agencies such as Moody’s and Standard & Poor’s (S&P) have been in focus throughout 2018 as investors have watched the Australian financial landscape increasingly enter new territory. This has largely been a function of the Royal Commission into Banking and Financial Services, as well as the more unstable political environment seen throughout the year. However, despite the negative [...]
The decision by G8 Education (ASX: GEM) to redeem and refinance its $50 million senior unsecured bonds in March 2018 was reasonably standard practice as far as corporate bond markets are concerned given a company in reasonable financial health. However, the $450 million syndicated bank facility announced in October was an interesting development in the long-running trend of Australian companies [...]
Ever since the Global Financial Crisis (GFC), funding costs in capital markets for both major and regional Australian banks have been steadily declining. This was first sparked by the Australian Government Guarantee Scheme which reduced the underlying risk in Australian authorised deposit-taking institutions (ADIs). In this post-GFC era, funding costs have broadly moved in line with changes in the RBA [...]
Earlier last week and before the more systemic selloff in risk assets, Italy’s 10-year government bond yields rose to a quite staggering 3.63% - the highest mark since 2014. Meanwhile, yields on the 10-year German Bund declined to an equally staggering 0.53% as the ‘lo spread’ between the two countries, which has long observed as a proxy for country risk, [...]
The month of September presented us with many of the same recurring themes, namely the ongoing US-China trade war rhetoric, whilst the RBA continue to hold the overnight cash rate at 1.50%. Commissioner Kenneth Hayne also released his scathing interim report from the Royal Commission, making recommendations including better enforcement of the law by regulators and a simplification of those [...]
Throughout 2018, we have observed the listed Tier 2 financial hybrid industry continue to shrink as names such as Suncorp and Westpac redeem their respective instruments. However, what may not have been as obvious is the flattening of the Tier 2 curve that has occurred throughout the year. To fully understand the catalysts of this, as well as the changing [...]
Quantitative easing (QE) was first pioneered by the Bank of Japan (BoJ) way back in 2001, when it was employed as a stimulative economic policy, after the BoJ ran short-term rates down to zero. QE’s mechanism for stimulation is the purchase of debt securities by central banks (in the secondary market), causing the central bank’s reserve supply to increase and [...]
The US-China trade war continues to remain the focal point of global markets, with the latest talks between the two economic powerhouses failing to progress as another $16 billion of like-for-like tariffs were imposed during August. At this stage, it is becoming increasingly likely that tensions will continue to worsen, with the majority of the impact on economic growth occurring [...]
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ABN 31 164 148 467 ‧ Important Information
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
