Aussie Surge Takes Sting Out of Bond Losses for Global Investors
by
Bloomberg News
A rally in the Australian dollar is taking the sting out of losses in the nation’s bonds for global...
A rally in the Australian dollar is taking the sting out of losses in the nation’s bonds for global investors, and 30-year market veteran Toshifumi Sugimoto sees further gains.
The country’s sovereign debt generated a loss of 1 percent over the past month, among the world’s worst. A surge in the Australian dollar means it has gained 4 percent in U.S. currency terms, behind only Greece and Portugal among 26 debt markets tracked by Bloomberg and the European Federation of Financial Analysts Societies.
Improvement in the local economy has led investors to scale back bets on Reserve Bank of Australia easing even as policy makers in Europe and Japan pursue negative-rate policies. That’s helped drive demand for the Aussie as investors hunt for Yield, with 10-year notes paying 2.57 percent as of 10:25 a.m. Thursday, versus 1.91 percent in the U.S. and minus 0.05 percent in Japan. The Federal Reserve signaled Wednesday it will probably carry out two interest-rate increases this year.
“The Australian dollar will get strong because Australia has a high yield,” said Sugimoto, the chief investment officer at Capital Asset Management in Tokyo. “I’m looking at a weak yen and a strong U.S. dollar this year because the Fed may raise interest rates, but Japan’s interest rate is low. There will be more purchases by Japanese investors.”
Haven Demand
The Aussie has risen against its U.S. counterpart and fallen against the yen this year as a flight to quality in the global financial markets sent investors to the perceived safety of Japan’s currency. The trend is running its course, and interest rates will emerge as the main force driving currencies, Sugimoto said. The Australian dollar will rise about 6 percent to 90 yen by year-end, he said.
Traders are increasingly betting RBA chief Glenn Stevens will hold the nation’s benchmark rate at 2 percent as growth quickens. Yields suggest traders expect 19 basis points of interest-rate reductions in the coming six months. It was 28 basis points as recently as March 9.
Australia’s economy expanded 3 percent in the fourth quarter from the year-earlier period, the government reported this month, the fastest pace since the start of 2014.
ECB, BOJ
Central bankers in Europe and Japan are undertaking unprecedented monetary easing to revive their economies. The ECB surprised investors this month with the extent of a new stimulus package. In February, the Bank of Japan unexpectedly added negative rates to its quantitative-easing program.
The Aussie is vulnerable as economic growth slows in China, said Hans Goetti, the chief strategist for the Middle East and Asia at Banque Internationale a Luxembourg, which has $36.4 billion under management.
The two are linked because China is the biggest customer for Australia’s commodity exports, Goetti said in an interview in Singapore. A bet against the Aussie, a so-called short, will benefit as growth in the Asian nation slows, he said.
“The concern is China,” Goetti said. “If you want to short China, just short the Australian dollar. ”
National Australia Bank Ltd. has seen a jump in foreign demand for the nation’s bonds after Japan adopted negative interest rates, said Peter Jolly, the head of market research in Sydney.
“If you’re a foreign investor in Australia, you’ve gained substantially on the Exchange rate,” he said.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net. To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Jonathan Annells
A rally in the Australian dollar is taking the sting out of losses in the nation’s bonds for global investors, and 30-year market veteran Toshifumi Sugimoto sees further gains.
The country’s sovereign debt generated a loss of 1 percent over the past month, among the world’s worst. A surge in the Australian dollar means it has gained 4 percent in U.S. currency terms, behind only Greece and Portugal among 26 debt markets tracked by Bloomberg and the European Federation of Financial Analysts Societies.
Improvement in the local economy has led investors to scale back bets on Reserve Bank of Australia easing even as policy makers in Europe and Japan pursue negative-rate policies. That’s helped drive demand for the Aussie as investors hunt for Yield, with 10-year notes paying 2.57 percent as of 10:25 a.m. Thursday, versus 1.91 percent in the U.S. and minus 0.05 percent in Japan. The Federal Reserve signaled Wednesday it will probably carry out two interest-rate increases this year.
“The Australian dollar will get strong because Australia has a high yield,” said Sugimoto, the chief investment officer at Capital Asset Management in Tokyo. “I’m looking at a weak yen and a strong U.S. dollar this year because the Fed may raise interest rates, but Japan’s interest rate is low. There will be more purchases by Japanese investors.”
Haven Demand
The Aussie has risen against its U.S. counterpart and fallen against the yen this year as a flight to quality in the global financial markets sent investors to the perceived safety of Japan’s currency. The trend is running its course, and interest rates will emerge as the main force driving currencies, Sugimoto said. The Australian dollar will rise about 6 percent to 90 yen by year-end, he said.
Traders are increasingly betting RBA chief Glenn Stevens will hold the nation’s benchmark rate at 2 percent as growth quickens. Yields suggest traders expect 19 basis points of interest-rate reductions in the coming six months. It was 28 basis points as recently as March 9.
Australia’s economy expanded 3 percent in the fourth quarter from the year-earlier period, the government reported this month, the fastest pace since the start of 2014.
ECB, BOJ
Central bankers in Europe and Japan are undertaking unprecedented monetary easing to revive their economies. The ECB surprised investors this month with the extent of a new stimulus package. In February, the Bank of Japan unexpectedly added negative rates to its quantitative-easing program.
The Aussie is vulnerable as economic growth slows in China, said Hans Goetti, the chief strategist for the Middle East and Asia at Banque Internationale a Luxembourg, which has $36.4 billion under management.
The two are linked because China is the biggest customer for Australia’s commodity exports, Goetti said in an interview in Singapore. A bet against the Aussie, a so-called short, will benefit as growth in the Asian nation slows, he said.
“The concern is China,” Goetti said. “If you want to short China, just short the Australian dollar. ”
National Australia Bank Ltd. has seen a jump in foreign demand for the nation’s bonds after Japan adopted negative interest rates, said Peter Jolly, the head of market research in Sydney.
“If you’re a foreign investor in Australia, you’ve gained substantially on the Exchange rate,” he said.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net. To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Jonathan Annells
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔