Economics
Australia's Stevens Asks if Policy Has Reached Its Limits
- Average spread drops to 15 basis points, matching 12-year low
- Trend is for `more tightening,' says Mitsubishi UFJ Kokusai
Glenn Stevens, governor of the Reserve Bank of Australia.
Photographer: Brendon Thorne/BloombergThis article is for subscribers only.
Australia’s states are enjoying close to the strongest demand for their debt on record, even as they struggle to adapt to slowing global economic growth.
Australian provincial bonds on average yielded as little as 2.34 percent last week, near the record low of 2.25 percent reached in April 2015. The difference over an index of federal securities shrank to 15 basis points, matching the lowest in 12 years. Iron ore production hub Western Australia, whose debt rating was cut one step to Aa2 by Moody’s Investors Service in February, sold A$1.1 billion ($857.9 million) of six-year debt on Tuesday.