In 2020, we saw a blowoff in stimulus. In 2021, we saw a blowoff in growth and equities. So far in 2022, we have seen a blowoff in inflation and commodities.
Now we are seeing a blowoff in interest rates and bond yields:
Banking funding costs have started to spike too:
The Aussie curve is now pricing an outright boom:
Dislocating entirely from Planet Earth where recession is approaching like an oncoming locomotive:
Thus, in classic cyclical style, Aussie banks have started to outperform as well:
The question is: is Australia really on another planet? Or is this just another crazed act of markets that are increasingly seized by high-frequency rotation?
Sell the bank rip and buy bond dip is my bet (not advice, of course).