NAB results offer further illustration of falling wholesale issuance costs
Half-year results published by National Australia Bank (NAB) on May 9 further illustrate the rapid tightening of wholesale funding margins in recent months. However, outstanding debt issued in a higher spread environment means the NAB's average term funding cost across the portfolio has only recently stopped rising and will not fall significantly unless the current issuance environment is maintained or further improves.
TCV's funding requirement expectations still on downward path
A projected return to surplus for the state government of Victoria in the 2015/16 financial year will see the funding requirement of Treasury Corporation of Victoria (TCV) fall below A$2 billion (US$2.04 billion), the corporation revealed on May 8. Analysts, ratings agencies and traders responded broadly positively to the May 7 Victorian state budget, especially the government's commitment to ongoing cost savings despite declining revenues and a challenging political position.
APRA not easing off liquidity requirements despite BCBS changes [UPDATED]
On May 6 the Australian Prudential Regulation Authority (APRA) released a second consultation paper covering Australia's Basel III liquidity reforms, revealing it does not plan to follow the lead of the Basel Committee on Banking Supervision (BCBS) by easing the requirements on banks – or the timeline for their implementation.
Inflation conditions allow RBA cut but no analyst expectation of direction change
Analyst responses to the May 7 rate cut by the Reserve Bank of Australia (RBA) largely coalesce around the view that the 25 basis point cut was a marginal call based on benign inflation conditions, with weaker employment data also contributing. Commentary points out the RBA's language in explaining the cut did not vary significantly from that outlining recent decisions to hold, supporting existing views on reserve bank tone.
BoJ lag slows AUD buying response from Japan
The announcement in early April of a massive programme of quantitative easing by the Bank of Japan (BoJ) is expected to suppress local bond yields even further and consequently force Japanese funds into international investments. But Japanese market watchers say that move has yet to begin, and the falling yen continues to cause repatriation of assets.