Daily Commentary BY THE CURVE TEAM –

Daily Insights – Fear Subsides

24th of September, 2021

Markets Sentiment Improves as Fear Subsides

  • Markets were in a much more buoyant mood overnight with bonds selling off (yields higher) and equities catching a bid
  • It comes as fears of a financial meltdown subside following the coupon payment by China Evergrand on a line of outstanding debt.
  • Long bond yields look like they might have broken out overnight with tapering news from the Fed still filtering through from the previous night.
  • We should hear more on that over the next 24 hours with more than half a dozen Fed official set to speak.

Opportunities

  • The move higher in long bond yields is making longer term fixed rate bonds look more attractive on the day.
  • Improved sentiment failed to impact credit markets with a number of end of quarter opportunities in FRNs still available.
  • Grand final long weekend in Victoria today will limit some NCD and TD availability so please be in contact if you have anything in particular and we can sort a solution.

David Flanagan

Head of Money Markets