Retail Government Bonds started to trade on the ASX today.
A total of 17 different maturities are being quoted, from December 2013 through to April 2029.
The US deficit figures for April were released on Saturday the 11th of May. Figures show that the deficit further narrowed from $910 Billion to $856 Billion on an annual basis.
I have previously discussed how the markets price the expected inflation over the coming years.
The graph below shows that a normal Government Bond maturing in 2015 is yielding ~2.50%. In comparison, a 2015 Inflation linked Government Bond holds a rate of return (real) currently trading at ~0.56%.
On the 30th June 2012 the Government unfunded Superannuation liabilities were $146.6 Billion dollars. One month later, on 31st July 2013, the superannuation liabilities were $235.8 Billion dollars, an increase of $86 Billion dollars or 5.7% of GDP.
Austerity supporters took a few body blows this week. What is economic austerity? That is when an economy is doing really badly, and the best solutions the politicians can come up with is to make the economy more bad. Politicians in the UK, for example, have been surprised to find that by cutting back expenditure and trimming the deficit, economic activity has actually contracted rather than improve.
Last Thursday (28th March 2013), the latest credit aggregates were released by the RBA. The figures show that total annual credit growth continues to de-accelerate from the pre-GFC highs of 10% to 15% to the current level of 3.3% per annum. The home lending (Owner Occupied plus Investment) growth has stabilized at around 4.4% annual growth.