Bank Bonds Explained: Why is there such a demand for hybrid securities?
When you purchase a bond, you are providing funds to the issuer, whether it’s a commercial bank or the reserve bank. The bond issuer is obligated to repay the investor the face value of the bond (corporate bond, bank bond , government bond, or hybrid) on a specified date and to pay regular coupon payments, either […]
ABE Weekly: Fixed income investments “the stand out asset class”
Australian Bond Exchange Weekly Update Friday 21st July 2023 Key Points The RBA minutes released this week showed rising unemployment concerns played a key role in the decision to pause. However, rising employment suggests another hike is on the horizon. US, UK & EU inflation data (easing to 3%, 7.9% and 5.5% respectively) suggests high […]
How do you calculate risk vs reward? Comparing the risks of bonds and shares.
Investing in any asset will always carry some kind of risk, which is why the risk/reward ratio is so popular with traders and investors in assessing the best investments for their specific situation. Whatever type of asset you choose to invest in, there is always risk associated, you just need to make sure you get […]
ABE Weekly: Equities get the boot as billions flow into fixed income
Australian Bond Exchange Weekly Update Friday 14th July 2023 Key Points Billions of dollars are flowing into fixed income (and billions are being pulled from equities), as major money movers including super fund managers and Wall Street veterans reallocate assets in response to rising cash rates and high inflation. ANZ Consumer Confidence Report shows homeowners […]
ABE Weekly: In the ‘Land of Confusion’ bonds could be the solution
Australian Bond Exchange Weekly Update Friday 7th July 2023 Key Points RBA pauses one of the most aggressive hiking cycles in history, as supply and demand begin to balance out. Now sitting at 4.1%, it is the highest RBA cash rate we have seen in 11 years. An uncertain economic outlook and an inability to […]
Why are interest rates going up? The RBA Cash Rate Explained
Today, the RBA decided to leave the cash rate unchanged at 4.1%. Raised a total of 4 percentage points since May 2022, the cash rate is now the highest it’s been since it was 4.25% in April 2012. Rising interest rates have caused many to start educating themselves on how the RBA cash rate works, […]
ABE Weekly: Investors find opportunities in higher yields despite sticky inflation.
Australian Bond Exchange Weekly Update Friday 30th June 2023 Key Points Leaders of central banks, economic analysts and top journalists discussed the state of global monetary policy and the ‘volatile inflation environment’ wreaking havoc on markets at the ECB Central Banking Forum 2023. Slow growth, high inflation, rising wages, low unemployment and high interest rates […]
Fixed Income & Bonds: A Comprehensive Guide For Beginners
The key thing to remember is that wherever you decide to invest your money, there is always risk involved. You just need to make sure you get paid for the risk with your returns. Generally, equities (shares/stocks) are high risk, high return, term deposits are low risk low return, and fixed income investments like bonds […]
ABE Weekly – Interest rates rising, but peak still a far climb
Australian Bond Exchange Weekly Update Friday 23rd June 2023 Key Points Bank of England hikes the cash rate half a percentage point to 5%, to fight sticky 8.7% inflation recorded in the year to April and in the year to May. RBA releases the minutes from the June monetary policy meeting, with upside risks to […]
What is the mortgage cliff and why does it matter?
Over 850,000 Aussies on fixed rate mortgages around 2% will soon be facing variable rates of around 6%. To understand the fixed-rate mortgage cliff in Australia in 2023, there are two key concepts you need to understand. The first is how COVID-19 fostered the lending of “free money” and encouraged borrowers to lock-in fixed-rate […]