Be prepared, isn’t that what the Boy Scouts and Girl Guides tell us?
Momentum is building with the market expecting the RBA Board to cut the cash rate from 4.35% on 18 February. This week, NAB announced it was cutting its fixed rate home loan rates, while HSBC chief economist, Paul Bloxham has changed his view and now also expects the first rate cut this month.
Which leads me to ask, are you prepared for a lower interest rate environment? Have you got the right mix of fixed, floating and inflation-linked bonds in your portfolio? US inflation could well reignite and the rate easing cycle could be short. It’s an uncertain time in markets.
But demand for bonds remains strong. This week the AOFM, launched a new government bond issue with a March 2036 maturity and according to the AFR, received a whopping $50 billion worth of bids.
This morning Pimco announced four new bond ETFs, which reinforces the sector’s appeal and increasing range of products available.
The Asset Backed Securities (ABS) sub sector continues to perform. Ken Hanton, summaries 2024 issuance and discuss the importance of the new year and his take on the market.
How does an initial yield of circa 6.2% sound for an investment grade bond? AusNet Services is back in the market with a new very long dated final maturity subordinated bond. Matt Macreadie from IAM reviews the company and the bond.
Emma Lawson from Janus Henderson is back with her January review of the Australian fixed income market. These monthly summaries are a wonderful way to keep in touch with what’s happening and are highly recommended.
Finally, another bond scam. This time using Bunnings. The threat is real. If you can, meet the people selling the securities. Call other fixed income brokers and ask if they are trading the bond. If the bonds are available, they will have heard about them.
Overnight, in the US, Vanguard announced a cut in fees for 87 funds, putting pressure on competition, especially smaller funds.
In news just in, Westpac is taking indication of interest (IOIs ) for a new 10NC5 subordinated bond with price guidance of 165 basis points over swap.
Have a good week!
