Greater issuance for AOFM after federal budget goes awry
Following the federal government's mid-year economic and fiscal outlook update (MYEFO), the Australian Office of Financial Management (AOFM) has increased its borrowing programme for 2013/14. Analysts are more concerned about the government's budget update given a stark revision in what has been a relatively stable global period, and expect rating agencies to hint at a desire to see a medium-term plan to protect Australia's triple-A rating.
NZDMO reduces funding expectation but reaffirms IIB commitment
The New Zealand Debt Management Office (NZDMO)'s funding programme for 2013/14 has been reduced – by NZ$2 billion (US$1.7 billion), to NZ$8 billion – following New Zealand's half-year economic and fiscal update (HYEFU). The funding update, which was published on December 17, reaffirms the NZDMO's commitment to issuing up to NZ$5 billion of its current-year requirement in the form of inflation-indexed bonds (IIBs).
Four cents not enough to make RBA comfortable but cash rate stays on hold
The "still uncomfortably high" level of the Australian dollar remains the key fixation of the Reserve Bank of Australia (RBA) in the eyes of analysts, with the reserve bank not changing its language on the exchange rate despite a drop to US$0.91 from US$0.95 in the month since its last cash rate decision. On December 3 the RBA left the Australian cash rate on hold, at 2.5 per cent, to the surprise of very few observers.
Domestic fixed income ill-favoured in Australian managed funds flows
Asset allocation within Australia's managed funds industry continued to see withdrawals from domestic fixed income in the third quarter, according to data published by Morningstar on December 10. In fact, withdrawals increased relative to the preceding quarter, despite Q2's activity being sparked by US tapering speculation which appeared to have passed by the time of the most recent data set.
WA treasurer talks tough on expenditure and emphasises importance of ratings
Speaking at an investor and dealer lunch in Sydney, the state treasurer of Western Australia (WA), Troy Buswell, emphasised the importance the state government places on its rating. Buswell admitted that ratings preservation may not have been a sufficiently high priority in the past, but insisted that WA's September downgrade by Standard & Poor's Ratings Services (S&P) has focused the attention of government – even if there is a political cost.