Bonds rip, fully price first rate cut of many

Monday, 24 August 2015

Where there are so many losers there are big winners too and bonds are they today. The Australian two year bond yield has just ripped down to 1.75% fully pricing another rate cut, which will now arrive in relative short order as the Chinese bid into Australian property is hit and households freak the fuck out:

Ridiculously, Australian bonds are still moving in lock step with US yields, which are moving perilously close to declaring the entire US tightening cycle over:

If yields move below 55bps then we’ll have a lower low in place for the first time in two years:

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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.