Australian Dollar Australian interest rates US Economy

Australia/US bond spreads hit new narrows

Thursday, 17 December 2015

The Fed rate rise is beginning to bite for the Aussie/US bond spread which will, over time, weigh on the local currency. Australian yields have retraced the ABS numberwang breakout:

But the short end of the US curve has broken out on US hikes:

Thus the spread continues to trend lower:

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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.