Monday 18 December 2017 by Leigh Winton Week in review

From the trading desk

Fed’s inflation predictor due Friday, active trades in Sydney Airport bonds and investors reinvest AMP sub debt. New DirectBond available from Network Finance Company

Please note that the trading desk has been abbreviated this week.

Economic wrap

On Friday, US economic data missed consensus with underwhelming results from both the Empire State Manufacturing Survey and Industrial Production and Capacity Utilization Index. This was more of a surprise considering the very strong run of other economic data. Given continued flattening of the US yield curve, most traders will be watching Friday’s release of the Personal Consumption Expenditures Deflator. This is the Fed’s preferred inflation gauge, and it is expected to print at 1.8%, slightly higher than October’s 1.6%.

Other news

Sydney Airport bonds experienced good flows after our note last week with investors weighing up the current price versus indexed face value – an overall view of shortening duration and the scarcity factor of longer term inflation product.

FIIG has a new AUD DirectBond available to wholesale investors for Network Finance Company (NFO), who are the finance vehicle for Endeavour Energy Group (a regulated NSW electricity distributor). The bond is investment grade and floating rate. The Factsheet is available here.

Reinvestment of AMP sub debt continues with investors to receive funds on or around 21 December. Clients who wish to reinvest proceeds at maturity should speak to their relationship manager as soon as possible.

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