Morning Report Tuesday 25 November 2014
The Murray enquiry puts the lid on our banks, an opportunity?
International Banking stocks are flourishing, led by the US. Last night, banks in the European Stoxx 600 Index advanced 1.3%, as they outperform on the prospect of further economic stimulus from the ECB. Interest rates are still incredibly low around the world. Last night the yield of Spanish government 10-year bonds fell below 2%, illustrating the confidence in the ECB’s latest stimulus measure – 2% yield for 10 years feels incredibly low after reaching almost 8% in 2012. The Australian banks are underperforming at present, hovering at 6% below 2014 highs (albeit with 3 of the 4 trading ex-dividend in November), this is a cork that I believe may easily pop after the looming Murray enquiry.
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