It’s going to rain rate cuts everywhere but Australia


RBA futures are still forecasting no rate cut until the end of 2024:

Bonds markets are less hawkish but equally sceptical of any easing in 2024:

Bond markets

The problem is Alboflation. With no end in sight to lunatic levels of immigration and Albo tearing down the border with India, the bond curve is eloquently expressing a permanent per capita recession in an inverted 1-5 year curve.

The 2-10 year shows that headline recession remains unlikely for the same reason of more warm bodies:

Bond curves

Aussie yields spreads to the US are grinding up as an increasingly dovish US outlook diverges from Australia’s chronic Alboflation:

Australia / US Yield Spreads

And globally, the rate cycle has turned dovish:

Global tightening

But, any way you cut it, the market is not offering much hope for interest rate relief to Aussie households as Alboflation forces them to make room for migrants via crushing mortgage rates.

I cannot think of a better way to bring on Prime Minister Peter Dutton.

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.