I’ve noted in my dollar musings of late that the bond spreads between Australia and the US have been tightening considerably. This has in part been because US prospects have risen and also because Australia’s have been fading, most notably over Q2, during which growth crashed from Q1’s cracking pace.
Here is the 10year bond yield:
There are a lot of inputs into the national bond rate one very important one is the cash rate and note how its anticipates and then falls through the easing cycle then anticipates its reversal. It sure isn’t signaling that the cycle is over now though whether it’s pricing another cut is up for grabs, especaially given the external environment of the dash for trash in higher yielding bonds squashing spreads all over.
