24 Oct – 28 Oct 2016

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The yield curve continued its recent short-term uptrend as yields rose at quicker pace at the long end. The 3y/10y spread rose 4bps to 62bps while the 3y/20y spread also gained 5bps to 119bps. Westpac sees this as ongoing process. “For now, the curve is very directional, and continues to be led by the long end. The recent escalation in inflation fears suggest that bear steepening impulses are likely to remain a feature of price action over coming months.”

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