Trade opportunities
It’s been a topsy turvy month in the bond market with certain signs of inflation perking up their heads, particularly in the US, which has led to a repricing of the expected rate cuts to come this year, moving more in line with the US Federal Reserve officials forecasts and pushing yields higher.
In this note we highlight the opportunity and how investors can achieve better returns as a result of participating in new issues, along with attractive pricing and better access, making it more attractive to purchase in primary or soon after.
In this article, our Head of Research, Philip Brown, summarises what BBSW is, how it behaves, and what is meant by bank bills, BBSY, swaps and benchmarks. The Bank Bill Swap Rate, commonly known as BBSW, is the most common measure of short-dated interest rates in Australia. Strictly speaking, it is the rate at which Australia’s prime banks borrow money for short periods, like three months or six months. BBSW is normally near, but just above, the RBA cash rate.
General
New issues update
As part of the recent FIIG webinar on the Macroeconomic Outlook, we opened the (digital) floor to questions. Working on the theory that if one person is curious enough to publicly ask the question, a lot more people are curious enough to know the answer, we present the questions from that webinar with answers written by FIIG’s Head of Research, Philip Brown.
FIIG research has published a detailed analysis of the outlook for 2024 and then followed it up with a detailed webinar on the same topics. For both the outlook for 2024 and for analysis of the RBA, the key to understanding is, in our view, to take a second look at the question to understand the details a little below the surface. In this article, we will take a closer look at the state government capex spending, cash rates around the world, labour markets in Australia and a LOCK strategy to guide successful bond market investing in 2024.
Education (basics)
Asset-backed securitisation is a funding technique that allows the pooling of a large number of loans into a single financing vehicle, which then issues a number of different tranches of debt with varying seniority.
General
New issues update
Trade opportunities
A month is a long time in markets, and it’s been at least that long since we updated the portfolios. It’s also been the summer holidays domestically which means a quiet time, and this has definitely been the case apart from one spike of activity around the new Santander bond. In the run up to Christmas interest rates fell quite a long way as the
end of the hiking cycle got some investors excited. Since then, the story has been a reversion of this excitement as some of the cuts began to be priced out again and yields rose.
Trade opportunities
The current portfolio yields an indicative 5.80%* to the assumed maturity dates and is an approximate $205k spend.