Federal debt boss: why borrowing isn’t easy

Original article by Adam Creighton
The Australian – Page: 4 : 26-Aug-19

Australian Office of Financial Management CEO Rob Nicholl has rejected suggestions that the federal government’s capacity to increase its borrowings has been boosted by the downturn in bond yields. The yield on 10-year government bonds fell below the cash rate of one per cent earlier in August, and Nicholls argues that demand for government debt has not risen despite a global downturn in bond yields. The federal government is resisting pressure to ramp up its infrastructure spending instead of prioritising a return to a Budget surplus.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT

Aussie 10-year bond yield drops below 1pc

Original article by Patrick Commins, Vesna Poljak, Jonathan Shapiro
The Australian Financial Review – Page: 13 & 27 : 7-Aug-19

The fallout from the escalating trade and currency war between the US and China has seen the yield on Australian 10-year government bonds fall below the cash rate for the first time. The bond yield reached a record low of 0.968 per cent on 6 August, before rising to 1.047 per cent late in trading. Meanwhile, the futures market has priced in an 0.25 per cent reduction in the cash rate by October, after the Reserve Bank left official interest rates unchanged at one per cent at its monthly board meeting.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, QIC LIMITED, ARDEA INVESTMENT MANAGEMENT PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UNITED STATES. DEPT OF THE TREASURY, PEOPLE’S BANK OF CHINA, EXANTE DATA

Australian government bonds forecast to fall below 1pc

Original article by Sarah Turner
The Australian Financial Review – Page: 13 & 16 : 18-Jun-19

The yield on 10-year Australian government bonds recovered slightly to 1.39 per cent on 17 June, after falling to a record low of 1.37 per cent in the previous week. Concern about the global economic outlook is weighing on bond yields worldwide, and Sally Auld of JP Morgan says the current bearish environment could see Australia’s 10-year bond yield fall below one per cent by the end of 2019. Steve Miller of Grant Samuel Funds Management says the expectation of further official interest cuts is putting downward pressure on local bond yields.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, GRANT SAMUEL FUNDS MANAGEMENT PTY LTD, ARDEA INVESTMENT MANAGEMENT PTY LTD, RESERVE BANK OF AUSTRALIA

Record low bond yields turn off investors

Original article by Jonathan Shapiro, Sarah Turner
The Australian Financial Review – Page: 31 : 31-May-19

The yield on 10-year Australian governments rose to 1.53 per cent on 30 May, having fallen below the official interest rate in the previous trading session. Factor such as the prospect of a rate cut in June and the US-China trade war have weighed on the local bond market, with international fixed income investors now looking at higher-yielding asset classes. Bond managers caution that yields may continue to fall, noting that bonds in countries such as Japan and Germany currently have negative yields.

CORPORATES
JANUS HENDERSON GROUP PLC – ASX JHG, COLCHESTER GLOBAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA

Ten-year bond yields plumb new depths

Original article by Vesna Poljak
The Australian Financial Review – Page: 31 : 29-Mar-19

The global bond rally has seen the yield on Australian 10-year bonds fall to a record low of 1.73 per cent, to the same level as New Zealand’s 10-year bonds. However, NZ currently has a higher official interest rate at 1.75 per cent, although futures traders have priced in two rate cuts in Australia by August 2020, which would reduce the cash rate to one per cent. Annette Beacher of TD Securities has not ruled out a further fall in bond yields.

CORPORATES
TD SECURITIES, RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, EUROPEAN CENTRAL BANK, UNITED STATES. FEDERAL RESERVE BOARD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Shares hit by fresh global growth fears

Original article by David Rogers
The Australian – Page: 17 & 28 : 26-Mar-19

The bearish sentiment that saw the S&P/ASX 200 fall to a three-month low on 25 March also weighed on the local bond market, with the yield on Australian 10-year bonds reaching a record low of 1.756 per cent. Growing concern about the outlook for the global economy also prompted a decline in the yield on US government bonds, with the yield curve inverting for the first time since 2007. Meanwhile, the Australian dollar reached an low of $US0.7066 in local trading, and Steven Miller Grant Samuel Funds Management expects it to fall further.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, GRANT SAMUEL FUNDS MANAGEMENT PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF CHICAGO

Bond proxies and dollar feel pinch as US yields surge to seven-year high

Original article by David Rogers
The Australian – Page: 17 & 28 : 17-May-18

The Australian dollar has fallen below $US0.75 after the yield on US 10-year government bonds peaked at 3.09 per cent, the highest level in seven years. This in turn prompted a sell-off of Australian-listed bond proxy stocks on 16 May, despite the local sharemarket posting a slight gain for the day. Hasan Tevfik of Credit Suisse expects global bond yields to rise further, and notes that Australian government bonds have a lower risk profile at present due to factors such as the nation’s low official interest rates.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, VANGUARD INVESTMENTS AUSTRALIA LIMITED, AUSTRALIANSUPER PTY LTD, BLOOMBERG LP, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, STANDARD AND POOR’S ASX 200 INDEX, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD, SPARK INFRASTRUCTURE GROUP – ASX SKI, APA GROUP – ASX APA, MIRVAC GROUP – ASX MGR, DEXUS RENTS TRUST, GPT GROUP – ASX GPT

CBA eyes bond market return after scandal

Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 : 11-Sep-17

The Commonwealth Bank of Australia may make a bond issue in the week beginning 11 September 2017. Australia’s large banks use such issues to help cover the gap between the amount of loans they have outstanding and the value of their deposits. If the CBA does proceed with the bond issue, it will be its first since AUSTRAC announced that it is taking legal action against it over alleged breaches of money-laundering regulations. The CBA raised around $A40 billion in fiscal 2017 from wholesale long-term debt.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, WESTPAC BANKING CORPORATION – ASX WBC, TRANSURBAN GROUP LIMITED – ASX TCL, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MOODY’S ANALYTICS AUSTRALIA PTY LTD, ALTIUS ASSET MANAGEMENT PTY LTD, SANTOS LIMITED – ASX STO, WOODSIDE PETROLEUM LIMITED – ASX WPL

Buoyant stocks at high for the year

Original article by David Rogers, Chris Kohler
The Australian – Page: 13 & 18 : 21-Dec-16

The Australian sharemarket posted solid gains on 20 December 2016, with the S&P/ASX 200 adding 0.5 per cent to close at 5,591.1. The benchmark index has risen by 5.6 per cent so far in 2016, and it may be poised for its best performance in a calendar year since 2013. Credit Suisse expects the S&P/ASX 200 to top 6,000 points by the end of 2017. The firm also forecasts that Australian bond yields will rise further.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, CREDIT SUISSE (AUSTRALIA) LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, SOUTH32 LIMITED – ASX S32, ESTIA HEALTH LIMITED – ASX EHE, SIRTEX MEDICAL LIMITED – ASX SRX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD

Shares to feel the jolt as ‘bondcano’ fires up

Original article by David Rogers
The Australian – Page: 31 : 17-Nov-16

The yield on 10-year Australian government bonds has retreated from a high of 2.74 per cent in the wake of Donald Trump’s presidential election win. The so-called "bondcano" has seen the yield on 10-year bonds rise by 51 per cent since August 2016, and Credit Suisse estimates that the recent sell-off is the 13th biggest since 1970. Hasan Tevfik of Credit Suisse expects bond yields to keep rising over the long-term, and identifies stocks such as Sydney Airport, APA Group and Healthscope as those most at risk from higher yields.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, SYDNEY AIRPORT – ASX SYD, APA GROUP – ASX APA, HEALTHSCOPE LIMITED – ASX HSO, ASX LIMITED – ASX ASX, BWP TRUST – ASX BWP, TELSTRA CORPORATION LIMITED – ASX TLS, WESTFIELD CORPORATION – ASX WFD, SCENTRE GROUP – ASX SCG, TRANSURBAN GROUP LIMITED – ASX TCL, STANDARD AND POOR’S ASX 200 INDEX, CROWN RESORTS LIMITED – ASX CWN, AUSNET SERVICES LIMITED – ASX AST, VICINITY CENTRES – ASX VCX, CHARTER HALL GROUP – ASX CHC, QANTAS AIRWAYS LIMITED – ASX QAN, NUFARM LIMITED – ASX NUF, MYER HOLDINGS LIMITED – ASX MYR, FORTESCUE METALS GROUP LIMITED – ASX FMG, LEND LEASE GROUP LIMITED – ASX LLC