Via Macquarie:
Australia-US bond yield differential going negative?
We think there is an even chance that Australian-US sovereign bond yield spreads fall below zero across the entire term structure (both short and long end) and potentially remain this way into late 2018. This was our expectation at the short end, but the rally in long bonds has already been more significant than we expected and downside pressures do not appear to have alleviated (inflation).