Aussie bond boom returns

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The RBA’s panic-busting QE is doing a great job of restoring order. Bonds have been bid almost without cease since the great dislocation:

I expect spreads to come in further yet. The curve is still far too steep for the massive deflation and growth bust that is at hand:

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The 10 year at 50bps and 15 year at 75bps seems reasonable. Beyond that it’s in the lap of the gods. Could Aussie yields go negative? Who knows!

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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.