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Readers will recall that MB remains comfortable with its bearish outlook for the economy and dovish outlook for more rate cuts and it’s becoming increasingly apparent that the bond market is swinging into line with the same view once more. In the last week or so yields have crashed from their “Straya is fixed” levitation and are now again pricing further RBA easing with the 2 year yield sinking to 1.89bps today:
The yield curve has also continued to flatten materially and although not yet alarming enough to prompt more rate cuts, is clearly trending that way:
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Seems to me the Aussie dollar looks way out of step…
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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.
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