Banks dash hopes for Aussie bonds

摘要

Rising returns on Australian bank deposits are dealing a fresh blow to efforts to stimulate the country's underdeveloped bond market. Since the Reserve Bank of Australia cut interest rates to an all-time low of 1.50% on August 2, all four major banks have raised their deposit rates, while passing on a portion of the reduction to mortgage holders. Commonwealth Bank of Australia, the country's largest and most profitable lender, raised its one-year fixed-term deposit rate by 55bp to 3.0% and lifted its three-year fixed-term deposit rate to 3.2%. It now offers far higher returns to depositors than it does to senior bondholders, with one-year and three-year benchmarks yielding around 2.25% and 2.5%, respectively.