Australian dollar falls as Aussie bonds catch a bid

See the latest Australian dollar analysis here:

Macro Afternoon

AUD is down during the day as ANZ shook up interest rate markets:

Aussie bonds are well bid:

XJO is off the canvas:

Big Iron is mixed:

Big Gas dead cat:

Gold off:

Big Bank dead cat:

Big Realty dead cat:

Just wait until the market wakes up to the RBA’s utter stupidity. Bonds to fly!

David Llewellyn-Smith
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  1. Really do the corrupt lying banks have that much impact from their comments?
    Reality The Australian financial markets are really in trouble

  2. Could the nz dollar pass the oz dollar with a imminent housing crash. Would it be better to hold nz dollars to hedge against possible depositor haircuts that might happen if banks such as westpac require a ballot bailout?

    • If you expect rates to rise buy short term bonds and sell long term and vice versa if you expect rates to fall. As yields rise bond prices fall which hits longer dated bonds harder.

    • If you think the economy will slow/contract for whatever reason (including central bank tightening which will have to be reversed at some future point) driving down inflation/inflation expectations buy long dated bonds.

    • I have been buying govt bonds on the ASX via ETFs, such as GOVT and RGB – these are the fixed interest types. I have chosen these for now as I think Oz interest rates will go lower (thus increasing the price of the bonds).

      I have also been buying VAF, IAF and BOND ETFs.

      I will consider floating rate bonds once I think Oz interest rates will increase (these will basically move the opposite way).

      Hope that is of some use.