Bonds/Interest Rates

Major US investment banks were frantically trying to head off a collapse in the US CDO market last night. Early warnings were what sent the Dow into a tail spin.

A jump in bond yields and a withdrawal of a JP Morgan bid for two hedge funds spooked Wall Street in the last hour of trade.

Long term capital flows into the US rose in April, belying bond price movements. But China has become a net seller.

The latest Westpac-Melbourne Institute Leading Index of Economic Activity has come in well above its long-term trend, indicative of an economy in a period of sustained strong growth.

Today may not be the day for Rio to close over $100, but it will be BHP and nickel stocks that will cop the brunt.

The CPI failed to frighten in the US on Friday as both the US and Australia look ahead to housing data this week.

US core PPI was only up 0.2% in May. Now for the CPI.

RBA Governor Glenn Stevens spoke at a business leader’s forum in Brisbane today and highlighted the bank’s tightening bias on rates remains as demand strength implies ongoing inflationary pressures.

The Dow posted its biggest rise in eleven months last night as retail sales surprised and bond yields eased – slightly.

The BIS has warned the soaring level of debt in corporate buyouts is the harbinger of a default crisis should rates rise further.