RBA refusal to hawk-up triggers bond bid

Tuesday, 4 April 2017

Aussie bonds were given a decent boost by the RBA today, very much along the lines of MB expectations, as bonds were bid across the curve:

The long end was especially firmly bid as markets realise that the window for RBA hikes is closing fast as a confluence of economic negatives bear down on Australia through H2 and it will have to rely on macroprudential for housing. Thus the curve flattened materially:

The same is happening in the US:

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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.