It’s kind of funny to watch, in the usual dark way. Having smashed house price gains into the earth last year by breaking RBA yield curve control, the Aussie bond market is now moving on swiftly to crash the property market entirely.
As US bond yields rage higher on the prospect of a hawkish Fed, Australian yields are slavishly following even as the Morricession guts the economy, inflation is far weaker than the US, and wage growth is absolutely nowhere by comparison.
As usual, it is house prices where the rubber hits the road for Australia and on this front, the bond back-up has already overshot spectacularly.
