Following the weak non-farm payrolls the FOMC is expected to leave fed funds rate target range unchanged this week. An update to the "dot plot" will be released along with the Statement of Economic Projections. As we have stated before there is a clear difference between the "dot plot" and market pricing. Aligning market expectations with forecasts in dot plot [...]
Given the persistently low interest rate environment, the search for yield is becoming an increasingly difficult task. Central banks’ ‘lower of longer’ stance of interest rates has led to exacerbated returns and the timing of a global economic turnaround is uncertain to say the least. The world is in a state of transition. High-growth emerging markets and cutting edge technology [...]
Last week all eyes were focused on US non-farm payrolls (employment data) which delivered an increase of 38,000 jobs (significantly below already low expectations of 160,000 new jobs) while at the same time figures from the last two months were revised down by ~59,000. As a result a rate hike by the Federal Reserve is arguably now off the agenda [...]
While The Federal Reserve Chair, Janet Yellen, has not detailed the exact timing, there is growing consensus that the second rate hike of the current cycle could happen as soon as mid-June off the back of an improved labour market. As a result, employment data to be released this Friday will be a key factor in determining how soon the [...]
With the successful closure of the second major bank Tier 1 hybrid book build of 2016, now is a good time revisit why these securities are issued and look at how these securities dominate the overall ASX listed interest rate securities universe. Generally speaking, the banks, insurance and diversified financial sector issue these securities to satisfy regulatory capital requirements (Figure [...]
Corporates tend to get overshadowed in a market dominated by banks but careful security selection could have warranted significant returns over the course of the current financial year. The smallest security on issue, Peet's Convertible Note (PPCG) was the ASX's best performer over the past 12 months, benefiting from a hot property market and prudent capital management policies, while Seven Group's TELYS4 [...]
The minutes from the Reserve Bank meeting released last week showed that the rate cut was line ball while minutes from the Federal Reserve meeting confirmed that June is “live” for the next rate hike. The key message from the RBA was that they are concerned by the sudden disinflation and worried that it could become entrenched. This is [...]
Figure 1: How Yields Have Moved Over the Past 9 Years Source: BondAdviser, Bloomberg & the RBA
With the AFR’s Street Talk yesterday reporting that Westpac Banking Corporation is on the verge of announcing the second new Tier 1 Hybrid issue of 2016, presumably to replace the $762.7 million Westpac Trust Preferred Security (TPS) (ASX Code: WCTPA), this is an opportune time to revisit how this segment of the ASX-listed hybrid universe has fared since the first [...]
The Risks of Unconstrained Bonds Funds Given the prolonged low rate interest environment, the search for yield is becoming an increasingly difficult task. As a result, unconstrained bond funds continue to be a popular solution. Although the yields seem relatively attractive, many investors are underestimating how far up the risk scale they can be once invested in these sorts of [...]
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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.
