The third quarter of 2019 displayed a continued trend of market volatility. Around the world, central banks have responded to economic conditions and persistently low inflation through further monetary stimulus and quantitative easing. The RBA, US Federal Reserve and European Central Bank have all cut rates in an effort to further stimulate economic and employment growth.
The Australian economy has shown continued resilience through population growth, public infrastructure spending and strong export commodity prices. However, areas of weakness include consumer spending, low inflation levels and an increase to the unemployment rate.
The outlook globally remains uncertain, with the ongoing US-China trade war and concerns over Brexit continuing to weigh on market sentiment and international trade.
Market conditions – the RBA cuts the official cash rate to a record low of 75 basis points in response to a higher unemployment rate and concerns over the global growth outlook.
Australian bank debt market – decreased loan volumes with refinances comprising the majority of transactions in the period.
Offshore bank debt funding – continued appetite for Australian corporate debt from offshore banks, in particular Asian-based banks.
Australian domestic bond market – modest increase in domestic bond issuance volume for Q3 2019.
USPP – noticeable decrease in volumes from Australia and NZ issuances during the quarter, however rolling 12 month volume remains positive.
Notable syndicated transactions for the quarter included: