Non-farm payrolls (US employment data) for October was the primary data release last week which provided some mixed signals. The new data came in just under consensus at +161k (+173k expected) but upward revisions from prior months gave a very strong net increase. The issue was that gains were weak in the private sector with the government, education and health [...]
Last week, domestic inflation data for the September quarter beat expectations with the headline Consumer Price Index (CPI) rising 0.7% quarter-on-quarter versus estimates of 0.5%. More importantly, core inflation (which strips out volatile items including commodities) increased by 0.35% for the quarter and 1.5% for the year which is in line with the RBA’s year-end forecasts. Due to this revelation [...]
Back in February 2016, trading margins of ASX-listed hybrid securities widened significantly. As a result, there were a number of attractive investment opportunities and following a relatively stable reporting season and shift in sentiment, margins began to retrace. While on the surface it appears margins are still tracking well relative to February, a more suitable performance measure would be to calculate [...]
The PaperlinX story never ends and continues to find its way into the media. For those who do not know, the PaperLinX Step-Up Preference Securities (ASX: PXUPA) initially listed in March 2007 and has been one of the worst performing securities in the ASX-listed debt and hybrid market over the past decade. The underlying entity, PaperlinX Limited, was hit hard by [...]
On Wednesday inflation data will be released for the September quarter. The previous quarter’s release was a key input in the RBA’s decision to cut the cash rate from 1.75% to 1.50% in August and we expect this week’s release will hold similar weight. While commodity prices will offer some relief to the overall figures, the RBA generally focuses on [...]
Last week the market witnessed a small retracement in bond yields at the long end of the curve (10+ year) as pressure abated. This is partly due to the European Central Bank President talking down rumors of a tapering of the central bank's asset-buying program. This means investors in the recent 30Y Australian Government Bond are now 'in the money' [...]
The BondAdviser Corporate Hybrid Handbook 2017 is designed to be a useful reference for ASX-listed corporate hybrid securities and the credit profiles of their underlying issuers. We believe there are a number of attractive investment opportunities across different corporate industries and the recommendation table below reflects our views on these particular securities. Corporate hybrids are overshadowed in a market dominated [...]
With the RBA identifying apartment oversupply as a key economic risk and the recent uptick in commodity prices supporting short term growth, markets are now pricing in little probability of a cut to the cash rate next month. All eyes remain on the US as global diverging monetary policy continues to shake financial markets. The Federal Reserve Chair, Janet Yellen, [...]
Following two cuts to the cash rate in May and August, the 10-Year government bond yield progressively decreased for the most part of 2016 as interest rates around the globe reached record lows. However, in the past few weeks, the 10-Year bond has risen in yield significantly from a low of 1.819% at the start of August to reach 2.303% [...]
During the September quarter, the listed interest rate security market performed strongly with credit spreads across most securities tightening as investors continued to seek higher yielding investments against the backdrop of a low interest rate environment. Securities received a boost in August as the Reserve Bank of Australia (RBA) reduced the official cash rate from an already low rate of [...]
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