Depressionberg shock: Aussie bond yields breach all time lows

Wednesday, 7 October 2020

The entirety of the Australian front end bond curve has slumped to all-time lows this morning, everywhere from one to five years maturity:

The very short is only at 10bps, clearly eyeing off a rate cut and, before long, the negative. The curve is far too steep still give the RBA will have no choice but to march out the maturities:

The long end is being supported by fears of blue wave stimulus in the US. That is premature but will probably get worse next year, so the RBA is going to have to buy to contain the long end here.

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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.