16 Nov – 20 Nov 2015

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Australian bond yields started the week by falling 6 bps as domestic markets responded to the Paris atrocities by anticipating a fall in European and US markets. Bond yields then did very little for the rest of the week as domestic economic data such as new car sales, third quarter wages inflation and the Westpac-Melbourne Institute leading indicator held no surprises, which was a change from the previous week when the data was either favourable or surprisingly strong. Even the RBA October minutes held little of interest.

The large rises seen over the past two weeks took a breather as 3 year yields fell 1bp to finish at 2.14% and 10 year bond yields fell 5bps to close at 2.94%. The 20 year bond finished the week at 3.46%, down 6bps over the week.

There were three Commonwealth bond tenders; the first was for $300m of June 2035 bonds, the next was for $800 million of April 2026s and the last was for $600 million April 2020s. The coverage ratios were 5.110, 3.060 and 4.417 respectively. In an unusual occurrence, the coming week sees a bond tender every day.

gov bonds 20nov

Offshore bond yields started the week by immediately falling but markets soon discounted any real economic fallout from the Paris terrorist attacks. The rest of the week was filled data important to bond markets in the form of US October CPI figures, US October retail sales figures, as well UK and European October CPI figures. European yields typically fell each day until Friday when they stabilised or rose a little but in the US yields essentially barely changed.

Continental European 10 year bond yields were down by 6-8bps while in the UK yields were down 11bps. US 10 year yields were largely steady over the week, as European falls were offset by US domestic issues such as the likely December rise of the Federal Funds Rate

The US/Australia 10 year bond yield spread contracted back to 68bps after the previous week’s blowout. Australian yields had anticipated the fall in European yields early in the week and, being one of the first bond markets to open for the week, yields dropped immediately.

See our New Debt Issues for a complete list of government and corporate debt issues
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AUST GOVT BONDS

MATURITYCOUPON
(%)
ISSUE
SIZE ($M)
CLOSING
YIELD
Δ WEEKΔ MONTHWEEK
HIGH
WEEK
LOW
15-Jun-164.75219001.98-0.010.091.991.98
15-Feb-176210961.98-0.020.131.991.97
21-Jul-174.25189002.040.000.162.042.00
21-Jan-185.5205002.090.000.232.092.04
21-Oct-183.25135002.13-0.010.242.132.09
15-Mar-195.25214472.15-0.010.242.152.10
21-Oct-192.75117002.22-0.030.222.232.19
15-Apr-204.5203972.26-0.030.202.262.23
21-Nov-201.7550002.36-0.040.182.372.34
15-May-215.75222992.42-0.040.182.432.39
15-Jul-225.75182002.58-0.050.172.592.57
21-Apr-235.5213002.69-0.040.172.702.67
21-Apr-242.75229002.82-0.050.192.842.81
21-Apr-253.25189002.90-0.050.192.922.89
21-Apr-264.25169002.96-0.050.192.982.96
21-Apr-274.75151003.04-0.050.183.053.03
21-Apr-293.2597003.20-0.060.173.223.19
21-Apr-334.598003.36-0.060.153.383.35
21-Jun-352.7542503.49-0.060.153.513.48
21-Apr-373.7575003.52-0.060.153.533.50
21-Jun-393.2540003.58-0.063.583.593.57

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