Measuring the bond sell off

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So, the bond bash resumed today for reasons discussed here. It’s feels big but is it? The answer is yes and no. In some markets the percentage moves are massive, such as Germany, where the 5 year has moved from -.15% to 0.1%, an astonishing percentage increase. But let’s face it, it’s hardly going to break the bank is it?

For Australia, the whole curve has jumped and steepened. The 2 year yield is at 2.15%, pricing in more than half a rate hike, long end yields are up even more chasing international markets:

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Thus the Australia bond curve has steepened suggesting a better growth outlook:

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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.