Australias Leading Fixed Income Yield Investing Report YieldReport

Time 2020-06-15 20:02:06

Web Name: Australias Leading Fixed Income Yield Investing Report YieldReport

WebSite: http://www.yieldreport.com.au

ID:2163

Keywords:

Fixed,Income,Australias,

Description:

An informative, reliable information resource for income & yield investorsPeter Cooper, MD, Cooper Investors JCB find the YieldReport to be an invaluable summary of all debt market activity. Whilst we are focussed on the highest grade bonds it is important to see what is..Angus Coote, Executive Director, JCB Active Bond Fund Interest rate commentary for 8 June 12 June 2020The US Fed held its June FOMC meeting and left its target range for the federal funds rate unchanged at 0%-0.25%. This much was expected. What attracted some attention was the discussion of yield curve control, something the Japanese introduced a few years ago and a policy currently half embraced by the RBA. The FOMC’s sombre outlook was also noted. Its forecasts indicate an expectation the target range will remain unchanged until the end of 2022 and general policy will remain stimulatory for some time.The rest of the world is looking a little shabby as well. The OECD said the global economy would shrink by 6.0% in 2020 before it recovered by 5.2% in 2021. These forecasts are subject to second waves of COVID-19 being kept at manageable levels.Sovereign bond yields typically reversed the previous week’s increases, almost to the basis point. A week ago, YR stated equity markets appeared to have moved on from the earnings downgrades which had or would come; that statement may have been premature. US equity markets tumbled late in the week and European markets followed suit. Safe assets were the beneficiaries.According to prices which reflect expectations of traders in the domestic cash market, the likelihood of another rate cut, whether it be 25bps or less, softened ever-so-slightly again. The head of Treasury forecast an unemployment rate 2% lower than Treasury had previous forecast, so the pain will be considerably less than expected at the end of March. In any case, traders appear to be taking the view the RBA will not move in any direction for some time.Term deposit rates fell again and the pace of changes over the week was largely in line with that of the previous week. However, out of 79 changes in the survey, 78 were rate reductions.Swap rates moved lower across the curve, especially at the long end, while bank bill rates and BBSW did not budge, thus remaining at levels noticeably below the RBA’s cash rate target but generally in line with cash rate expectations (see “domestic cash market” above). A BBSW rate at or near the 0.10% interest rate the RBA pays on exchange settlement account balances may indicate banks would rather invest in bank bills than in lending to borrowers.Semi-government spreads remained quite stable, while spreads of corporate bonds tightened a little. Other measures of corporate risk, such as credit default swap premiums and swap spreads, continued their recent practice of moving in directions not consistent with each other.On the topic of spreads, the ICE Bank of America BBB US Corporate Index Option-Adjusted spread has risen sharply since the end of February. During 2019, the spread over US Treasury bonds ranged between 127bps and 173bps. At the end of this week the (provisional) reading was 218bps, up 10bps from the previous end of week’s final reading. The spread peaked in late-March at 488bps.The median trading margin of ASX-listed hybrids moved a touch lower to remain at the upper range of “normal”. Trading margins of ASX-listed notes varied in both directions almost equally for a second week. For those readers interested in instant diversification of assets, or a broader range of securities within an asset class, the cash and bond segment of the ETF sector offers a tradable alternative to unlisted managed funds.Readers may be interested to refer to YieldReport’s new page for ASX-isted investment companies and trusts which invest in bonds, notes and other interest-bearing securities.As for readers who wish to be more involved with the composition of their investment portfolios, some of the peer-to-peer offerings currently available can be found here. There have been some new additions recently.April 2020 monthly interest rate commentaryBond yields fell in most major markets except for those in Italy and Australia. The spread between US and Australia 10-year bond yields widened from +8bps to +25bps as the Australian yield increased while its US counterpart fell.In Australia, Treasury yields began the month with a substantial fall, only to bounce back the next day. After a few days of stability, bond yields jumped as S P downgraded Australia’s outlook from stable to negative. From the middle of the month, yields eased, only to begin a series of small increases which lasted until the remainder of the month. At this point, the 3-year ACGB yield had eased 2bps to 0.25% (the RBA’s target rate), the 10-year yield had gained 15bps to 0.89% while the 20-year yield finished 7bps higher at 1.51%.In the US, the ADP’s private sector payroll survey for March was the first notable report of the month and it indicated only 27000 jobs were lost Click here to read moreWhat is YieldReport?YieldReport provides Australia’s only independent analysis of the interest rate markets and interest rate securities. Access to our site and regular email updates are free and only requires registration.What do I get?YieldReport provides a weekly and monthly report on:Cash AccountsCompare the top cash account rates and monitor wholesale market movements and expectations on future cash ratesTerm DepositsInstantly compare over 470 term deposits. These are genuinely quoted rates and YieldReport does not receive any commissions or fees for providing the dataBondsGet pricing data on government and corporate bonds, news and commentary on market movements, the prices for the latest debt issues and moreHybridsCompare hybrid issues, review the latest pricing and receive notification of upcoming new issuesManaged FundsCompare dozens of managed Australian and international bond funds, diversified income funds, cash funds, mortgage funds and ETFsPeer-to-peer LoansCompare current peer-to-peer investments and rates offered by peer-to-peer lendersAnyone dealing in cash or interest rate products will benefit from our independent analysis and price comparisons.Why is independence important?The vast majority of fixed interest securities are not traded on a public exchange; hence pricing is opaque at best. In addition, fees are included in quoted prices and rarely disclosed. Most investors are at an information disadvantage to market dealers and this is likely to cost an investor money. Occupation*If Other, please specifyEmailThis field is for validation purposes and should be left unchanged. Occupation*SMSFNot for profitGovt/CouncilAccountantsIndividualCompany ExecBank/Fund MgrFinancial AdviserOtherIf Other, please specifyPhoneThis field is for validation purposes and should be left unchanged.

TAGS:Fixed Income Australias 

<<< Thank you for your visit >>>

YieldReport is Australia’s only independent analysis of interest rate markets and securities. YieldReport provides news focused on fixed income ..

Hot Websites