News
The effect of reduced market-making capacity in fixed income – both in Australia and globally – is an intended consequence of banking regulation, the Reserve Bank of Australia (RBA) confirms. However, speaking at the KangaNews DCM Summit in Sydney, RBA assistant governor, financial markets, Guy Debelle, says he believes developments that are currently in their infancy may act to mitigate the impact of constrained bank trading books over the coming years.
New Zealand market participants are positive about the state of international demand for local-currency assets, which is supported by global low yields and competitive pricing. They suggest that a shift in deal flow seen over the first two months of the year reflects New Zealand's strong fundamentals.
The Australian Prudential Regulation Authority (APRA) gave an update on its review of lending practices in the housing market on February 25. The regulator emphasised the supervisory, rather than prescriptive, nature of its oversight – and stressed that it does not believe it has a mandate to influence the outright level of house prices.
The most recent issuer to price a residential mortgage-backed securities (RMBS) transaction in the Australian market reveals a wider investor base for its latest deal even than its jumbo transactions from 2014. Hints that 2015 volumes may exceed previous years may be supported by early-year issuance activity, the latest deal's lead manager says – but the true level of market capacity is yet to be tested.
A constructive tone in the Kauri market drew four supranational, sovereign and agency (SSA) issuers to place deals in January 2015. Deal volume added up to NZ$2.1 billion (US$1.6 billion) – a monthly record for the Kauri asset class – and market participants highlight encouraging demand trends behind the flow.
Analysts have started responding to the shock result in Queensland's January 31 election, which saw the standing Liberal-National government's massive majority wiped out in one swoop. They expect a clear market response to an expected change in policy direction, but see a less significant credit impact.
ANZ Banking Group (ANZ) opened the door to a new jurisdiction for tier-two issuance on January 21. The bank and its leads tell KangaNews about a pricing outcome which suggests this new issuance option might provide the best tier-two economics for Australian banks after their domestic market – and with volume which moves the dial on the total requirement.
In the first of a series of three articles exclusive to KangaNews online, Australian credit investors reveal their outlook for the local market in 2015. Investors lay out their views on demand, supply and the macro outlook as they relate to financial institution (FI) and corporate bond dynamics in the year ahead.
The Australian dollar market opened for business at the earliest opportunity in 2015 as a supportive basis swap facilitated a swathe of Kangaroo deals from supranational, sovereign and agency (SSA) borrowers. A marked upsurge in interest in SSA Kangaroos from a notable investor sector leads market participants to ponder the extent to which SSAs could substitute for potentially lower supply in other high-grade asset classes in 2015.
The latest half-year financial and economic review data show the New Zealand economy is moving from "rock star to rock solid" while Australia's budget targets are increasingly becoming a moving target, analysts say. The respective debt management offices are faced with accordingly divergent funding tasks.
KfW Bankengruppe (KfW), the Kangaroo market's largest issuer, is moving closer to bringing its "Green Bonds – made by KfW" programme to the Australian market. A funding update published by the agency on December 15 names Australian dollars as one of two currencies in which it is exploring offering green bonds in 2015.
Analysts believe new steps announced by the Australian Prudential Regulation Authority (APRA) as a means to "reinforce sound residential mortgage lending practices" represent a combined regulatory effort. Indeed, earlier this year the Reserve Bank of Australia (RBA) flagged its preference for macroprudential-type tools to be used, if at all, by the prudential supervisor rather than the reserve bank.