CPI was released this morning and rose to 4.6% for the 12 months to February 2026, up from 3.7% last month. The largest contributors to annual inflation were Housing (+6.5%), Transport (+8.9%), and Food and non-alcoholic beverages (+3.1%). The important trimmed mean was unchanged from 3.3%.
The unchanged trimmed mean and the fact that higher fuel and food prices should act to dampen consumer spending may be enough for the RBA Monetary Policy Board to keep rates on hold at its next meeting in early May.
The US Fed meets tonight to assess the federal funds target range, with commentators expecting the rate to remain unchanged at 3.50-3.75%.
Betashares’ Chamath De Silva published this table comparing policy rates and sovereign yields recently. Australia has the highest policy rate and is the only economy to hike in the last three months.
Another corporate hybrid has come to the market with Suncorp Group announcing indications of interest yesterday for a perpetual non-call 6.1-year deal with price guidance of 270 basis points over 3-month BBSW. The deal launched today, and price guidance has already firmed by 10 basis points. Corporate hybrids have been snapped up by yield-hungry investors, and this deal is likely to be oversubscribed, and pricing may tighten even further.
This week I tuned into the Mawer ‘Art of Boring’ podcast with Brian Carney. Carney is a pessimist. He makes a good case for sticking to quality. I especially liked that he gave examples of two high-yield names where they saw value and why they decided to invest.
Laura Cooper from Nuveen says the list of risks is growing but that resolutions remain elusive. Further, at some point, the weight of what is being ignored could become the only one that matters. This is a good article.
I was fortunate to interview emerging market specialist Kirstie Spence and local Haran Karunakaran from Capital Group last week. Their message is to build resilient portfolios. Spence is based in London and has spent 30 years in EM debt. She really put the case for EM into context.
Ninety One’s Darpan Harar and Justin Jewell compare the US private credit market against high yield.
It was great to see Mineral Resources’ successful USD raise.
Here’s the latest on domestic corporate bond issuance:
- Beyond Bank has mandated a three-year floating rate note
- Downer Group Finance priced a $400m fixed rate deal at 175 basis points over semi quarterly swap or 6.488%
- Mirvac WOF has priced a $600m senior unsecured dual tranche green bond deal
- A $300m five-year tranche with a 6.041% coupon
- A $300m seven-year tranche with a 6.317% coupon
- MUFG Sydney raised $1.2 billion in a senior unsecured floating rate note at 67 basis points over 3-month BBSW
- People First Bank raised $500m in a five-year floating rate note priced at 128 basis points over 3-month BBSW
- Suncorp Group has launched an Australian Additional Tier 1 perpetual issue with a 6.1-year non-call period. Price guidance is 260 basis points over 3-month BBSW
- NextDC has priced a $750m subordinated four-year floating rate note at 3m BBSW + 350 basis points.
Have a great week.
