The market is now expecting a greater chance of a cut by the RBA than a hike over the next year. At the same time the central bank has held firm in its bias to leave rates on hold. In this quarter’s update our Australian rates PM, Tim Hext, offers his views on the outlook for 2019 and what could move the dial. We also assess the prospects for the local credit market, where macro risks have weighed on investor appetite and liquidity has become increasingly scarce. Meanwhile in cash markets, funding cost increases have fuelled out-of-cycle mortgage rate hikes. Our Cash PM, Steve Campbell takes a deeper dive into the causes and also examines issues in the RMBS market. Finally, we discuss new developments in the ESG arena including NSW TCorp’s first green bond issuance.

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In this Australian Quarterly Update, we analyse the hot-button issue of negative gearing and the potential effects of proposed Labor policies on the domestic housing market. We also look at why some of the broader global concerns appear to be easing for local credit investors, as well as developments in the local cash market. Finally, we examine ESG trends in Australia and distinguish between the range of different classifications in the area.

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