Stocks may be holding up as Australia sinks into an epic double-dip recession but the bond market is anything but calm. The bid is big and persistent:
The curve is being slaughtered:
And we’re outpacing offshore leads with negative spreads to the US across the curve
Though certainly tracking China.
A crushed yield curve should be negative for banks and cyclicals and positive for defensives, duration and yields plays.
Though the rapid fire nature of the COVID recessions will probably be a factor in the equity market looking over the valley.
The currency should also remain under pressure.