Aussie bonds price rate hikes

Tuesday 11 October 2016

Aussie bonds are taking their cue from oil and central bank moves to steepen yield curves. The selling is not extreme but its decent enough with the two now nearly fully pricing a rate hike at 1.72%:

The long end has moved much further and so the slope has steepened:

I really don’t see this as some push towards higher growth. Indeed it is bear steepening to me, coming out of the oil bid lifting inflation expectations a little.

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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.