Last week equity markets rallied and bonds fell as the domestic 10-Year Futures yield increased from 2.64% to 2.73% before falling back to 2.65% this morning. US equities again moved to record highs but new issuance in the credit market was limited due to thanksgiving holiday in the US. We have moved back to macro-policies defining outcomes for bond investors. [...]
Following the surprise election of Donald Trump as the next President of the United States, bond markets around the world have been sent into chaos. With many of Trump’s policies reflecting a pro-growth agenda, inflation expectations (a primary driver of long term interest rates) has surged taking both the Australian and US 10-Year government bond yield along for the ride. [...]
In December 2014, the Australian Prudential Regulation Authority (APRA) wrote to all Australian Deposit-Taking Institutions (ADIs) stating that mortgages should be stress tested under the scenario that interest rates rise at least 2% above current loan rates, setting the minimum rate (floor) at 7%. This suggestion highlighted that serviceability tests should be calibrated at an interest-rate set at a level [...]
Over the past two weeks, markets have continued to be influenced by the likely policies President-Elect Donald Trump will implement during his first term. Inflation expectations (a primary driver of long term interest rates) has surged taking both the Australian and US 10-Year government bond yield along for the ride. This has been a direct function of the pro-growth agenda [...]
In Australia, many investors fail to reap the benefits of geographical diversification. The international fixed income market is more than 10 times larger than the Australian market and offers a greater variety of sectors and industries. As foreign fixed income instruments are generally denominated in the base currency of country of origin, the primary deterrent of international fixed income is [...]
Yield curves are steepening across the globe and Australia is no different. Stoked by fiscal changes inflation is the primary driver and the next focal point is the Fed. Pricing for a December Fed funds rate hike remains firm at 80%, supported by comments from several FOMC officials recently. FOMC voter Bullard, as well as non-voters Lacker and Williams, have [...]
The US Election last week caused markets to gyrate dramatically primarily because most investors were not prepared and / or hedged for a Trump victory. As a result, bond prices tumbled and equities soared. In fact, the Dow Jones Industrial Average managed its biggest weekly gain in nearly five years. But the real question is why? And what does it [...]
With the September bank reporting season now complete, several common themes have emerged across the sector that we expect to continue to play out over the next twelve months. Earnings increase but margins remain under pressure and growth targets lowered. Although cash earnings for Australian banks remained robust during 2016 revenue growth is becoming difficult, suggesting the earnings cycle may [...]
With ~$4.7 billion of net issuance of ASX-listed debt and hybrid securities in 2016, investors have not been short of supply but with three large-scale hybrids due for redemption before years end, where will this maturing capital go? Figure 1. 2016 Transactions Date Ticker Issuance ($m) Replaced ($m) Net Issuance ($m) 30-Mar-16 CBAPE $1,450 PCAPA - $1166 $284 7-Jun-16 PPCHA $100 PPCG [...]
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 [...]
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An employee-owned financial services provider focused on the Debt Capital Markets.
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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.
