Bonds are typically viewed as a defensive component of an investor's portfolio. They tend to perform best when your riskier assets are doing poorly. Stuart Dear, Deputy Head of Fixed Income at Schroders says the analysis they've conducted shows this relationship has held true in all but one circumstance over... Show More
It was February 4th, 1994, and I was on a plane to LA from Sydney. I was treating myself to 4-week holiday skiing in Aspen and then on to New York; 1993 had been a good year. Initially when my boss, Richard Farleigh, had resigned 10 months earlier I wasn’t... Show More
Mark Haefele, the Global Chief Investment Officer at UBS penned a short note on the US market’s drastic pullback, calling for calm and suggesting it is not time to reduce exposure, not unless rates or inflation keep rising. Here’s his comment in full: Show More
There are many explanations for the astronomical rise in house prices along Australia’s eastern seaboard. But most economists settle on is that we haven’t built enough homes in Sydney, Melbourne and Brisbane to support their booming populations. Show More
Bond Bears have become vociferous again in line with the recent move higher in US 10 year yield, which has moved higher by 36 bp, the highest for the year thus far as it currently sits at the average yield for 2017 at 2.31%. This has all the trademarks of... Show More
When we look back upon the financial excess prior to the GFC, the great bust and near financial Armageddon, the multiple bouts of global quantitative easing transferring private debt to governments thereafter, it will make a historic story for the grandchildren. Boom to bust to boom again within a decade,... Show More
Just as the markets had convinced themselves they were in for an uneventful carryharvesting summer, something started to change at the end of the month, with central bank communication seemingly dominating economic data with respect to their impact on market moves. Whilst the theme of disinflation continued to play out... Show More
In The AFR I reflect on Thursday's landmark financial market event wherein the 10 year Aussie government bond yield fell to below 2% for the first time ever (the 3 year yield also hit a record low of less than 1.5%), which has important valuation implications for all asset-classes. Despite... Show More
Resource sector equity values have normally varied inversely with risk appetite measured by the cost of finance. The chart illustrates the historical link between the Australian small resources share price index (the red line) and the spread between CCC rated US corporate bond yields and US government 10 year bond... Show More
Why are Mario Draghi and the ECB now in denial about a risky German bond bubble? Late last week, the German 10-year bond suffered what’s being described as its ‘Freaky Friday’ when the yield fell to just 0.051 per cent. It was freaky because as Greece teetered on the brink... Show More
The 60 year history of US nominal GDP growth and bond yields shown here is one of the clearest guides to the medium term direction of interest rates. In the first 20 years, bond yields were chasing growth rates. They caught up during the early 1980s and changed the direction... Show More
