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Aussie bonds have had a good run of late as the bear market rally and cooling local data have their day:
Spreads to the US at the short end have blown out. This is still a lot of pressure for the AUD:
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Also, the Aussie short end has inverted with the 1s and 2s upside down. That’s a bad sign for growth.
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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.
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