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um no that is literally what I said. Read it again and make sure you know the difference between bond price and bond yield.
Well, I was hoping for the simple part, as the data points I put up were quite simple, and showed that post announcement of QE, the yields gave a damn good impression of going up, which is the opposite of what you posted (without any supporting data I might add).
Mick
As usual, exactly the opposite of what everyone (even the RBA) says QE/bond buying does.
Bonds fell quite a lot since the start of QE (which is according to the RBA supposed to increase bond prices/decrease yields).
Immediately after the news that RBA was ending QE, bond prices shot up (yields fell).
(speaking as someone who holds 25% of their net worth in long duration Government bonds and tracks their pricing closely across the yield curve)
On a directly related subject, household energy bills to rise 54% in the UK from April:Oh and just in case anyone's still unclear on how to profit from inflation, just think about what actually drives inflation:
And this is the other reason why my crypto mine is in tasmaniaOn a directly related subject, household energy bills to rise 54% in the UK from April:
For those on lower incomes who already choose between heating or eating, it's all going to be rather miserable.
For everyone else well more money spent on energy means a corresponding reduction in spending on discretionary things and/or investments with the resulting flow on effects economically.
Here in Australia well I wouldn't expect to see a 54% jump in one hit but there's definitely cost pressure in the industry. The LNG netback price is presently $39.11 / GJ versus domestic market prices between $9.52 and $11.25 depending on state. Given the increasing linkage of the Australian market to international markets, that huge gap won't persist - either international prices are coming down or Australian market prices are going up rather a lot.
BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise
BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise By Bloomberg
BOE Hikes Rates as Four Officials Push for 50-Basis-Point Risewww.investing.com
DYOR
The short answer is Australia's a major producer of natural gas but, since the ability exists to export gas that creates a partial linkage of Australian prices to international prices.Australia is actually pretty good when it comes to self sufficiency in raw materials. But this is smurf's wheelhouse so I'll let him answer.
Also, australia now has a east coast natural gas grid, with all major pipelines being interconnected, so trading gas from any of the production zones into the LNG facilities is possible, there is no stranded gas that local buyers can screw down the price on.The short answer is Australia's a major producer of natural gas but, since the ability exists to export gas that creates a partial linkage of Australian prices to international prices.
If gas is selling for $x internationally then that's going to be a very relevant factor for anyone negotiating a new contract with a producer. Both parties will be very consciously aware that, up to the limit of the capacity of the LNG facilities, they can sell an effectively unlimited amount on the international market at the prevailing price as there's no shortage of buyers.
For that reason the ACCC calculates what they refer to as the netback price. That's not the international market price as such but it seeks to answer the question of how much gas is worth to the LNG producers taking into account the cost of liquefaction in order to be able to ship it. In other words, what's the upper limit they could pay and break even?
Some recent data there:
December 2019 (pre-pandemic) = $6.53 per GJ
July 2020 (pandemic low) = $2.29
April 2021 = $6.44
May 2021 = $7.64
June 2021 = $9.69
July 2021 = $11.74
August 2021 = $14.38
September 2021 = $14.85
October 2021 = $22.18
November 2021 = 39.35
December 2021 = $36.30
January 2022 = $41.24
February 2022 = $39.11
In the short term Australian users are protected by contracts and so on so there's been no real impact thus far but contracts don't run forever. As they come up for renewal, the international pricing situation is going to be a factor in negotiations between gas producers and retailers who sell it to consumers.
How significant is gas?
For some businesses and individuals it's basically irrelevant but for various manufacturing businesses etc it's highly significant and it's also of significance for many households.
Of itself gas won't make or break inflation, I'm not suggesting it will, but but whether it's Australia or the UK (or anywhere else) it's another straw on the proverbial camel's back, it's another thing where there's upwards price pressure. In the UK's case that's now flowing through to consumers whereas in Australia the effects are thus far contained due to existing contracts etc but those don't last forever, the price pressure is there as they come due for renewal.
Price data I've quoted is from the ACCC website.
None of them ever admit that they got it wrong, just change their stance to accomodate the new reality.FRANKFURT, Feb 3 (Reuters) - The European Central Bank finally acknowledged mounting inflation risks and even opened the door a crack to an interest rate increase this year, marking a remarkable policy turnaround for one of the world's most dovish central banks.
The ECB has long argued that high inflation will fall back below its 2% target on its own later this year but a string of record-high readings have challenged a narrative that other central banks abandoned months ago.
"Inflation is likely to remain elevated for longer than previously expected but to decline in the course of this year," ECB President Christine Lagarde told a news conference.
"Compared with our expectations in December, risks to the inflation outlook are tilted to the upside, particularly in the near term," she said, arguing that price growth across the 19 countries that use the euro is becoming more broad-based.
"The situation has indeed changed."
While Lagarde said the ECB would not rush into any move, she declined to repeat her previous guidance that an interest rate increase this year was "very unlikely".
It’s on.Further to @mullokintyre post.
Bank of England raises interest rates to 0.5pc, Meta faces historic market wipeout, ASX higher on late rally
Australian shares close in positive territory after a choppy session. Meanwhile, global equity markets tumble as frightened investors digest disappointing updates from major central banks about the outlook for inflation and interest rates.www.abc.net.au
Bank of England raises interest rates to 0.5pc
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