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Australian bank funding costs resume climb

Monday, 14 December 2015

It had to happen. As the mining GFC took off last week, Australian bank funding costs are beginning to move once more in sympathy. CBA CDS lifted 7% last week to its highest in a couple of months at 84.3bps:

Moreover, this pre-dated Friday night’s big moves in US and emerging market junk:

So we can expect more today for bank CDS and much more in the period ahead as the global mining, emerging market and high yield credit tightening worsens.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.