Bonds say no to rate cut

Advertisement

The Australian bond market has been moving sharply against a rate cut in the past 24 hours with yields up sharply across the curve:

1

The curve has been steepening as well as the long end sells hardest:

3
Advertisement

Part of this is the global sell off in bonds, which has actually seen Australian spreads to the US and Germany contract. All markets appear to be suddenly pricing marginally stronger growth which makes sense with the US likely to rebound from its Q1 slump, Europe traveling OK and China aiming to stabilise things.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
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.