Source: Bloomberg This is the morning’s action on the bond market today. 3 year bond yields are close to 3.80% and I’d say Bill Evans (Westpac) will come out looking like a genius (perhaps I should too but unfortunately I doubt it) after predicting the next rate move will be down. With markets around the world …
Category Archive: Economy
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Aug 03
Australian Government Bond Yields…getting ugly now
The above Australian government bond yield curve is only yesterday’s data and its looking grim (today’s much worse). I imagine that the Australian dollar/bond is looking quite attractive compared to European and US bonds so I’m sure that has some influence but its still indicative that the markets aren’t that positive about markets nor our …
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Aug 03
De ja vu?…and a messy interest rate commentary
Maybe I’m missing a few details and hopefully I’m wrong but I remember in the middle of 2008 the RBA were talking up inflationary concerns due to the China effect, raising and threatening to increase rates despite overseas blow-ups (Bear Stearns, etc). Right now, it has a similar feel, the RBA is once again concerned …
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Jul 28
Inflation Up? Not really just interest rate rise panic
The above chart has been copied from www.rba.gov.au and shows annual CPI change over the last 16 quarters and guess what? The latest quarter’s figure, excluding volatile items is 2.5%! Right in the middle of the RBA’s inflation target of 2% to 3%. When the Reserve Bank looks at inflation they do not, or should not, consider …
Jul 16
Australian Government Bond Yield…the outlook’s not so good any more
What a difference three months can make. The Australian Government Bond Yield has gone from a positive outlook, to negative, and Bill Evans of Westpac has just made the call that the next interest rate move from the Reserve Bank should be down. For those of us who read this blog, you may recall that …
Jun 24
Australian Government Bond Yields…pretty much flat
Well, flat, it pretty much is. What a difference a couple of months can make…from a nice gentle normal looking yield curve to very very flat out to five years to maturity. Pretty obvious stuff here…housing has slowed, inflation isn’t a perceived threat, the Euro crisis has global recession potential written on it, and the …
Jun 07
Reserve Bank No Change…but some movement on the yield curve
Source: Bloomberg As the above Australian Government Bond Yield curve chart shows, whilst the Reserve Bank left the cash rate unchanged, the shorter end of the yield curve decreased in yield by up to 5bps. This represented around a 1% increase in price of the Australian government bonds maturing within the next 5 years…quite a …
Jun 02
Australian Government Bond Yields – still flat
Source: RBA The above chart of the Australian Government Bond yields shows little change since 23 May with just a marginal flattening at the longer terms to maturity. No surprise given financial markets continuing its volatility combined with significant risks that include Greek bond default and poor economic news out of the US. Whilst this information …
May 25
Australian Government Bond Yield Curve…flattening
Not surprisingly the Australian Government Bond yield curve has flattened signficantly over the last month. The longer part of the curve is lower than it has been for much of this year which is typically an indication of less confidence in the economic outlook in our country. On the other hand, the shorter term yields …
May 12
Perpetual Portfolio Manager’s Interesting View
I just had a meeting with Charlie Lanchester, who manages half of Perpetual’s massive Industrial Share Fund, and his views on the Australian economy were far more dire than many commentators are saying. Like many, he believes that commodity prices are very high and showing signs of faultering (doesn’t mean they going to crash just …