fixed income

It's right to worry about US inflation

Simon Doyle

Although much of the focus remains on the February market activity, a tipping point between unemployment and inflation in the US approaches and so inflation remains a key risk. February revealed the first cracks in the relative market stability of the last year, as higher inflation fears both drove bond... Show More

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A dangerous consensus

Livewire Exclusive

At the height of the financial crisis, credit markets seized up and liquidity disappeared. In the aftermath of Lehman’s bankruptcy, this caused huge headaches for investors, institutions, and regulators. It may surprise you to learn then, that turnover in these markets is lower today than it was at the nadir... Show More

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Outlook 2018: Australian credit remains attractive

Nick Bishop

We expect 2018 to be a stable year for Australian fixed income, with the performance of the domestic economy constraining the RBA’s ability to increase interest rates in the near-term. This is predominantly the result of weak wage growth and inflation running below the RBA’s target. The former is due... Show More

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Fixed Income Outlook for 2018 – Damien Williamson

Bell Potter

2017 year has been a positive year in the ASX Debt and Hybrid market, where an absence of shock events has restored investor confidence. A 0.34% fall in major bank wholesale funding costs has also been supportive of the hybrid market, combined with historically low levels of market volatility. With... Show More

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Q4 Investment Outlook: Braver for longer…

Fidelity International

How long can the good times roll? The second-longest yet arguably most-hated bull market in post-war history just grinds on and on, while investors get more worried by the day. Valuations in some areas are certainly becoming stretched, but overall they remain some way off the peaks seen in 2000.... Show More

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Bond Bull Rips Apart Bears

Christopher Joye

In the AFR today I dwell on the doves' case apropos "low rates for long" and, in particular, engage with the lord of the domestic bond "bulls", Charlie Jamieson, who is uncompromising in his evisceration of the bond "bears" as represented by the likes of Tim Toohey and Brett Gillespie... Show More

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Spectrum Insights – Average focus, below average outcome

Damien Wood

Investment prices keep rising. Valuations are now well beyond long term averages for many asset classes. Pundits are increasingly calling for a big correction. Fears of overvaluation is also found in the corporate bond market. Credit spreads – the extra margin for default risk – are now notably lower than... Show More

Webinar: MCP Master Income Trust IPO

Livewire Equities

Metrics Credit Partners has announced confirmed demand of over $400 million for the initial public offering (IPO) of the MCP Master Income Trust (ASX: MXT), making it one of the largest listed managed investment raising in Australia to date. This webinar provides an overview of the offer and investment process. Show More

Spectrum Insights - The capital adequacy fallacy

Damien Wood

The recent collapse of a Spanish bank, two Italian banks, and a missed payment on tier one notes from a German bank reinforced some core beliefs for investing in bank capital. These are:- Show More

Linkers surge on UK inflation shock: a British history lesson

Ardea Investment Management

The events surrounding Brexit have spun off many important lessons for markets, not least of which is the importance of considering all possible outcomes when assessing risk in financial markets. Show More

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Australian banks– flaunting history

Damien Wood

Risk management, or the lack of it, is usually the key difference between the fortunes of banks when times get tough. History books are full of evidence of what went wrong after a financial calamity. That’s the easy part. The hard part is to foresee the problems. The high level... Show More

Two charts we are watching closely right now

Ardea Investment Management

As fixed income investors concerned with protecting the value of client portfolios, two interesting charts for us at present are the outlook for US as well as Australian inflation and the level of volatility in fixed income markets. Show More

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The Best Bond?

Damien Wood

The argument usually comes down to Connery or Craig. Both highly popular James Bonds brought different styles to the big screen. The “best” 007 actor, though, maybe more a case of which one best suited the social environment of the time. For investors, the best bond, similarly, largely depends on... Show More

Rise up! How high could US bond yields rise?

David Bassanese

Global bond yields have started to lift over the past year after several years of trending down. This post examines how structural and cyclical factors have affected US bond yields over recent years and what a “normal” level of US bond yields might look like going forward. Show More

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Passing the baton

Vimal Gor

The first month of the year should help set the tone for the remainder of 2017. One of the most important takeaways from recent market activity has been the shift in the perceived importance of event risk. The voice of central bankers has seemingly witnessed a decibel level drop as... Show More

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Spectrum Insights - The problem with “bubbles”

Damien Wood

“The OECD concludes that Australia has the most over-valued housing market, with prices 52% above their ‘correct” level.“ Similar warnings continue as do the related dangers of investing in those financing the market – banks. The problem is the quote above is from December 2005. The point being, just because... Show More

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2017: Adapt or perish

Fidelity International

A re-evaluation of investment theses is underway across all asset classes, industry sectors and geographies. Investors must quickly adjust to rapid shifts in the investment landscape’s tectonic plates or risk losing ground. We remain structurally positive on technology stocks thanks to strong levels of innovation. While smartphone growth is fading... Show More

Spectrum Insights - The worst of both worlds

Damien Wood

Australia’s RBA has its foot on the accelerator while the global bond markets are tapping on the brakes. Just when Australia’s economy could do with some stimulus it faces some headwinds from abroad. Rising bond yields internationally are spilling over into our bond markets. This hurts fixed rate bond prices.... Show More

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Global Fixed Income markets: a fragile balance

Tamar Hamlyn

Recently, I returned from a study tour of the world capitals of global macroeconomic policy. This report includes my observations from the road after meeting with key policy making officials, as well as economists and market participants across the US, EU, UK, China and Japan. In short, the current market... Show More

Time to start taking duration risk seriously

Richard Murphy

UBS and Goldmans have just called the timing on Australian cash rate rises – early 2018, based on inflation growth. Fixed income fund/ETF investors who have benefited from falling rates need to take account. The AFR’s Christopher Joye has also rightly focused on growing fund duration risk in many articles,... Show More

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