Apr 30
Source: RBA I know its just a week and a half since I last provided an Australian Government Bond Yield curve update but over this time the curve has dropped another 20-25bps to mostly be below the bottom from 19th December. This is largely on the back of weak inflation data…deflation if you look at the seasonally …
Apr 24
Source: RBA, Comminsure, Challenger Life, RimSec The above chart is pretty strong evidence as to why investors are placing their money into term deposits and annuities…very very attractive margins over government bonds. As you can see, at the 5 year term the interest rates for term deposits and annuities are almost double! When you consider that …
Apr 19
Source: RBA The above chart shows that bond yields shows that after bond yields reached a high around 1 month ago they have declined across all terms by around 50bps. That means that most of the traditional bond funds would have produced capital gains of around 2% over that last month (because the duration od …
Apr 02
Source: RBA In less than two weeks the yield curve managed to drop around 15bps back to levels similar to those of late January. This is despite slightly stronger equity markets, the ASX200 made it through the 4,300 barrier for the first time in many months, and not that much in the way of really bad news…I …
Mar 20
Well…not normal yet. The shorter part of the curve suggests the market is expecting another two 25bps cuts by the RBA but with the Euro sovereign crisis well and truly looking much better its highly unlikely there’ll be any cuts soon. Whilst there’s plenty of evidence that shows the Euro sovereign crisis has improved, nothing …
Feb 24
Unfortunately whilst the yield on Greek 1 year bonds is high at 730% (yes there’s no decimal point), it can hardly be described as good. When you have a 730% interest rate on your 1 year loan, its pretty safe to say that your chances of paying it back are zero. I understand why Greece …
Feb 20
A look at the average returns of bonds over the last 30 years does not suggest that equity returns have really been worth the risk. Table 1 shows the returns on Australian Bonds (Aust Comm Bank All Series/All Maturities) versus the accumulated return of the Australian sharemarket (S&P/ASX 200 TR) and whilst equities have the better performance …
Feb 09
When I saw the headline in the Market section of today’s Australian Financial Review I thought bond yields must have gone through the roof but the above chart shows that there ‘s only a relatively small increase compared to a couple of weeks ago. Markets had obviously priced in a rate decrease from the Reserve …
Feb 07
I was just reading the latest riveting story on bonds in this month’s Asset magazine and I feel compelled to share an example of misinformation that tends to annoy me a little (I know its probably a little pathetic but anyway)…John O’Brien, van Eyk – Head of Research, apparently said that many of the great …
Jan 29
Source: RBA Its been a few weeks since I provided an update on the local government yield curve and consistent with the slight improvement in the sharemarket the Australian Government Bond Yield Curve has indicated a better outlook for the local economy. As the chart shows, since 6 January the yield curve has increased around …