The RBA has driven yields down but dang is that curve warped:
That slope says massive recovery with inflation imminent! Not.
As the risk parity liquidaton eases I expect long end yields will fall along way. Indeed, for some enterprising hedgie with the firepower to do it, it is a singular arbitrage opportunity. There is no recovery or inflation coming.
Meanwhile, the same twisted shape has long end yields exhibiting a positive carry to the US, in theory putting upwards pressure on the AUD, though nobody cares today:
That shouldn’t last, either.