Australian Dollar Australian interest rates

Bill Evans gives bond yields a shove

Friday, 5 December 2014

Perhaps it’s the Bill Evans roll over or just the more generalised shift in interest rate expectations today but bonds are sharply bid with yields all at new lows and the 2 year now pricing 19bps of the first rate cut at 2.31%:

The spreads to the US are also narrowing fast, especially at the short end:

Plenty of pressure coming to bear on the carry into the grossly overvalued Aussie, which is still stuck just below 84 cents. A decent NFP in the US tonight and it’s trapdoor time.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

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.