The Reserve Bank of Australia has held interest rates steady because its expects growth will be close to trend and inflation close to its target two to three percent range.
However, it promised to cut rates “should demand conditions weaken materially.”
The RBA left its cash rate unchanged at 4.25 percent, in line with economists’ expectations. It cut the rate by 25 basis points in each of November and December last year.
Governor Glenn Stevens said underlying inflation is currently about 2.5 percent and headline CPI inflation will fall further over the next quarter or so.
Excluding the impact of the carbon price, inflation should remain within his target over the coming one to two years.
“Most information on the Australian economy continues to suggest growth close to trend overall,” Stevens said.
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We have located Aa3 rated Lloyds Banking Group Brazilian Real bond maturing July 2015, and are anticipating a better than 10% yield for our clients.
Corporate Bond linked to Brazilian Real
Lloyds Banking Group has bonds denominated in the Brazilian real with an expected yield of over 10.00 % for 48 months. This debt instrument compares well with other European banks, with slightly higher yields and a bit longer maturity than other recently targeted Brazilian real denominated bonds. This four year bond provides diversification into a country that was one of the first emerging markets to begin a recovery after recession hit in late 2008, and whose GDP growth returned to positive in 2010.
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POUND
Sterling began to fall heavily against the Euro after the Bank of England minutes released yesterday. This fall has continued this morning with sterling reaching a low of 1.1772 and 1.5649 vs. the USD. The pound has also been weakened by a stronger than expected German ifo survey. The BoE minutes were the main catalyst for sterling’s decline, providing a very dovish reading for the market, with it now likely that further QE will take place after two members of the committee voted to pump an additional 25 billion sterling on top of the 50 billion that took place earlier this month. I personally feel the movements in the past 24 hours are a little over done so we should see some recovery in sterling’s value today.
EURO
The Euro is trading strongly against the pound and USD after a better than expected German Ifo survey helped renew confidence in the region and the single currency. The data which measures business sentiment has raised expectations that the euro zone’s largest economy could avoid a recession. Inves
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For two years, Europe’s politicians have been promising to save the euro, whatever the cost. But the problems have kept on growing. Do you believe the second aid programme for Greece will be successful?
Yes, I do. But the work has only just begun. With the adoption of this comprehensive financial package, we are sending a clear signal: Europe is helping Greece, and important international institutions, such as the IMF, are assisting as well.
What is different this time?
Of course the ball is now in Greece’s court. The country has started to take action: for example, to cut the minimum wage. Above all, however, political debate in Greece has changed. The Greek people and Greece’s politicians now have a completely different attitude towards their country’s responsibilities. The key to controlling risks lies with the implementation of the programme, which has to be flawless. The upcoming elections will be very important. It i
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Over the last six months, mortgage rates have dropped to record lows while credit remains tight. To understand where rates might go from here and how credit conditions might change, I spoke with Paul Gershkowitz, the Co-owner and President of Greenpark Mortgage. He’s been in the mortgage business for twenty eight years and co-founded the largest privately–held mortgage company in New England before its sale to a Fortune 500 company in 1999.
Paul told me that in his opinion we are in uncharted territory with rates. There is a likelihood rates might drop lower in the near-term but buyers shouldn’t count on that and would be smart to refinance or buy now, if they haven’t already.
He believes there are three keys to the direction of the economy, real estate, and by extension, rates:
- Employment: If we see two consecutive months of non-farm payrolls more than 300,000 than rates will go up.
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