Quantitative Easing
By Peter Sheahan, Director Institutional Markets at Curve Securities
Peter Sheahan, an institutional deposit broker at Curve Securities, told me that a form of QE is already underway. He points to the level of Government deposits held by the RBA (the purple bar in the chart below). It has been falling rapidly as Government agencies appear to be circulating money back out to the financial system as soon as possible and not holding deposits with the RBA. The amount on deposit has fallen a further $23 billion from $41 billion to $18 billion since 30 June 2019. Some banks believe there is already more liquidity in the system than ever before and it’s one reason the RBA did not cut rates last week. It’s “cash flow optimisation to stimulate activity.”
Housing risks have ‘abated’ as prices bounce back, say top regulators
By Andrew Murray, CEO at Curve Securities
The nation’s top regulators appear to be breathing a sigh of relief, saying financial stability risks caused by falling house prices have “abated somewhat,” as values bounce back in Sydney and Melbourne.
In its latest quarterly update on systemic issues facing the financial system, the Council of Financial Regulators (COFR) on Monday toned down its concerns about the availability of credit, but still painted a picture of soft mortgage market.
RBA to trigger ‘unprecedented’ rush to zero rates for savers
By Peter Sheahan, Director Institutional Markets at Curve Securities
Another cash rate cut could trigger a race to the bottom that will push banks into “uncharted territory” for rates on term deposits and savings accounts, which are rapidly sliding to zero, according to deposit specialists.
The big four banks’ savings rates have already been cut by around 30 basis points, which means there is not much room to move if there is another 25 basis rate cut on Tuesday with another in the pipeline.
‘Real’ returns for savers heading close to negative
By Clancy Yeates, Quoting Andrew Murray CEO at Curve Securities
The situation facing people who rely on interest income is increasingly bleak: returns are worryingly close to negative in “real” or inflation-adjusted terms.
Even if you hunt around for the “specials” offered by major banks, latest Reserve Bank of Australia figures show the average return you will get is only a tad above 2 per cent, which is higher than the 1.3 per cent inflation rate – but only just.
Curve Securities Bolsters Financial Technology Solution with Skuid
Curve Securities has very much been shaped by the technological age and we are able to ‘elevate’ our clients’ performance by exploiting technology to provide an automated and streamlined process to secure these opportunities.
Banks slice term deposit rates as funding costs ease
By Andrew Murray, CEO at Curve Securities
Banks have sliced interest rates on term deposits as financial markets place growing bets on a cut in official interest rates, further squeezing the paltry returns available to savers.
The impact of liquidity on asset prices
By Peter Sheahan, Director for Institutional Markets at Curve Securities
Reserve Bank is using its daily money market dealings to control a system awash with liquidity. For the first time since 2013, cash has been lent interbank at a rate lower than the official cash rate. The 90-day bank bill rate has fallen from 2.1% in January to 1.69% now, and our Central Bank has withdrawn over $4 billion from the system in April so far.
What is the RBA to do next?
Director of Interest Rate Markets David Flanagan was on Your Money this afternoon discussing unemployment, the RBA & the future of interest rates.
Melbourne & Sydney house prices plunge further in January
Property prices in Sydney and Melbourne dropped sharply again in January as the decline in the once-booming housing market continues to gather pace.
Prices in the Melbourne market fell by a huge 1.6% in the first month of the year, eclipsing even Sydney’s 1.3% fall, researcher CoreLogic said on Friday in its regular monthly release.
RBA flags 3 risks to Aussie prosperity
Addressing the National Press Club, Reserve Bank of Australia (RBA) governor Philip Lowe warned of the three major risks to the country’s economic growth outlook. Our Director of interest rate markets, David Flanagan appeared on YourMoney to analyse the data presented and speak about the economic outlook.
Bank Funding & Rates
Director of Interest Rate Markets David Flanagan was on Your Money this afternoon discussing bank funding & the future of interest rates.
The Federal Reserve calls time on cheap money
Director of Interest Rate Markets David Flanagan was on Your Money this morning discussing the Fed, interest rates and the future of the Australian economy.
Volatility in Markets
Director of Interest Rate Markets David Flanagan was on Sunrise on Channel 7 this morning. He joined Kochi to discuss Wall Street and the volatility in financial markets.
Economic Outlook
Director of Interest Rate Markets, David Flanagan on Your Money discussing data for the week ahead and how consumption could hit back the outlook of the economy.
Current Market Trends
Our Director of Interest Rate Markets, David Flanagan on Sky News Business discussing the budget, ASIC, interest rates, funding pressures & the Fed on Sky News Business this afternoon.
The next stage in the mortgage refinance market
One key factor of profitable banking is to lend long and borrow short with adequate control of pricing margins. However, replenishing the supply of liabilities is a much more important element, writes Peter Sheahan, director of institutional markets at Curve Securities.
Government’s First Home Saver Scheme
Director of Interest Rate Markets David Flanagan was on Sunrise on channel 7 this morning. He joined Kochie to discuss the first home buyers super saver scheme, house prices, the RBA and mortgage rates.
Bank battle for savers to lift deposit and mortgage interest rates
Mortgage rate hikes are on the horizon – our CEO Andrew Murray sheds light on funding struggles.
“It’s a significant move up in rates that reflects some of the funding pressures that seem to be systemic at the moment.”
Can Australia’s property market survive a price fall?
Great to see Curve’s Director of Institutional Markets Peter Sheahan quoted in the AFR. There’s extraordinary developments taking place in funding markets and a loosening of the power the RBA has through monetary policy.
David Flanagan on Sky Business speaking about US wages, CPI and NAB Business survey
All eyes remain on bond markets as the monetary policy debate continues in both Australia and offshore. See what Curve’s David Flanagan had to say on Sky Business News about the outlook for monetary policy and the bond market ahead of the recent US CPI release as well as what the latest NAB Business Survey means for the local outlook.
Term deposit interest rates dwindle to record lows
The Reserve Bank may have kept official interest rates unchanged for the past year, but it’s a different story for people with savings in the bank.
Interest rates paid by banks on term deposits, a preferred way of saving for many, continue to fall to record lows.
Andrew Murray, Curve Securities CEO says there are anecdotal signs banks are not as hungry for term deposits as they were a few months ago.
For the big four banks, saver behaviour is the great unknown
Peter Sheahan of deposit specialists Curve Securities says he’s seeing plenty of evidence that the banks are doing what they can to manage the “funding gap” that isn’t getting any smaller.
“Some of the recent decisions by major banks have seen significant changes of direction,” he said.
Optus My Business Awards finalists revealed
Curve Securities was announced as a finalist for Finance Business of the Year, Workplace of the Year & Business Leader of the Year!
This year there were hundreds of submissions across 24 award categories, representing businesses right across Australia. Sadly though, not everyone can progress to the next stage, which makes the achievement of our finalists even more impressive.
The war for deposits is returning
Andrew Murray, Curve Securities CEO, says banks are competing more aggressively for longer-term deposits to satisfy looming regulations.
“There’s a battle for deposits, but it’s going to be a selective battle,” Murray says. “It’s all about funding stability, so the banks can prove, if we have another financial crisis, that they have long-term money.”
China’s economic growth rate could be headed to 6%
David Flanagan, director of interest rates at Curve Securities, told Business Insider that the big positive from the GDP data was “clear signs that the Chinese economy is making the transition away from its export-led growth strategy with services share of the economy growing”.
But he also said there is a strong chance that the Chinese economy continues to slow from here. Flanagan pointed out that the Chinese leading indicator of economic growth has continued to fall and is currently sitting at a level consistent with a 6% growth rate.
Here’s Why the Chinese slowdown has global central bankers so worried
David Flanagan, Director Interest Rate Markets, breaks down the relationship between German exports and the Chinese leading indicator of economic growth.
Banks tighten term deposit rules as capital changes loom
CEO Andrew Murray said banks were making changes in response to new rules designed to make sure banks have enough liquid assets to survive 30 days of financial turmoil.
Bond market bracing for a 1994-style crash
By Elizabeth Fry
According to Curve Securities CEO, Andrew Murray, Aussie fund managers have been slow to move in the past as evidenced by the bond market crash of 1994.
“Here the rolling sell off (rise in yields) in bond markets over a number of months caught some fund managers by surprise. They held desperately onto their long positions in the hope the selloff would stop until it was too late,” he said.
A 1994-style bond sell-off: the other view
By Elizabeth Fry
Andrew Murray, managing director of Curve Securities, agreed that in this situation, rising rates are not necessarily a big problem especially for portfolios with shorter durations.
Neither does he see the real threat to a US bond portfolio coming from the Fed lifting rates especially if it is successful at keeping the economy in check.
Where the real problem materializes is if inflation starts to build pace and the Fed (or in Australia, the central bank) is unable or unsuccessful at controlling it.
“In this situation you’ll see aggressive selling in the bond market lifting yields and, if you need to sell prior to maturity capital losses will mount significantly,” said Murray.
Greens Happy But Ratepayers Left Poorer
Bonded by a mutual goal
Peter Sheahan, from Curve Securities, said numerous legislative impediments had to be overcome to get to this point. ”We’ve sort of spent 12 years looking at the legislative and disclosure hurdles … and we had an antiquated settlement and transfer system in our past where the Reserve Bank only had one point of sale where one could buy and sell the [bonds].”
Admin preventing transfer of funds
By Bela Moore
Financial planners are being stymied by anti-money laundering laws and the onerous administration tasks involved in transferring client funds from one term deposit to another, according to Curve Securities managing director Andrew Murray.
Hungry banks pay up for hard cash
By John Kehoe
Banks ramp up reliance on offshore capital markets
By Jonathan Shaprio & Shaun Drummond
Peter Sheahan of Curve Securities, a specialist term deposit broker says the golden age of juicy deposit rates is maturing. He says the banks are struggling to write enough new loans to make up for the prepayment of existing home loans as borrowers take advantage of low interest rates to pay down debt.
“The prepayment speed means the money is coming in faster and faster as rates fall so they can’t keep their asset book as high as they want to,” he said.
“No Aussie bank can push a button to advise all its customers of a reduced repayment plan when the interest rate they are paying is moderating or falling.”
Your clients’ biggest risk?
By Peter Sheahan, Director for Institutional Markets at Curve Securities
With the volume of cash sitting in super funds, the recent cash rate cut should seriously concern both members and advisers.
It seemed like everyone except George Soros was surprised when the Reserve Bank of Australia (RBA) dropped the cash rate to a record low of 2.75 per cent on May 7. The market had, nevertheless, priced in by almost 100 per cent the chance of a cut in June, so if the economy needed a cut then the sooner the better.
Term deposit guarantee clarified
By John Kavanagh
Andrew Murray, a director of fixed-interest broker Curve Securities, said his advice was that such term deposits would be covered by the $1 million guarantee until February 1 and would then be covered by the $250,000 guarantee.
Murray said: “The Treasurer’s statement was unclear on that point. We had a few of our large clients calling us about it.”
Why is quantitative easing like antibiotics?
By Peter Sheahan, Director for Institutional Markets at Curve Securities
In the heyday of the baby boomers’ asset accumulation phase, they significantly benefitted from the two most important performance enhancing “peptides” at the time. Inflation and compounding were formidable catalysts on the velocity of dollar-value growth in an investment portfolio comprising high allocations of property and cash. Equity and purchasing power were being amassed at record pace.