Australian bonds price rate hikes

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Market are sure determined to call the RBA’s bluff. I guess they know a bunny when they see one. Following another lukewarm labour market report, bonds have sold again with the 2 year now pricing half a rate hike at 2.13%:

1

Very amusing!

The longer end is harder to judge and is more influenced by international forces but I’d say both are also very mispriced at 2.36 and 2.98.

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.