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Sheesh, big gap opens this morning for US bonds and not up!
The USD has torn to new highs as well. On the longer term charts the long end of the bond curve is getting flogged:
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That down trend looks like it wants to reverse! Australia is following:
And slopes for both are steepening fast:
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Even more in Aussie markets:
Though thankfully the spread is still closing hence pressure on the Aussie dollar:
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Again, so long as the delusion that Trump will boost commodity prices holds then the local market can chase the US yield back-up. But when commodity prices break the two markets should dislocate, at least somewhat.
That suggests a great bond buying opportunity ahead.
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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