Commentary courtesy of Spectrum Asset Management’s Lindsay Skardoon.
| Close | Prev Close |
Change | |
| Aust. 90 day bank bill% | 1.77 | 1.77 | 0.00 |
| Aust. 3 year bond%* | 2.13 | 2.14 | -0.01 |
| Aust. 10 year bond%* | 2.85 | 2.87 | -0.02 |
| Aust. 20 year bond%* | 3.27 | 3.31 | -0.04 |
| U.S. 2 year bond% | 2.16 | 2.11 | 0.05 |
| U.S. 10 year bond% | 2.90 | 2.83 | 0.07 |
| U.S. 30 year bond% | 3.16 | 3.11 | 0.05 |
| * Implied yields from Mar 2018 futures | |||
LOCAL MARKETS
Aussie bonds are and have been sold overnight as U.S. bonds sold off following the release of the CPI. Bonds are likely to remain weak on the day however as the weakness continues they may present good entry levels to buy.
U.S. BOND MARKETS
U.S. Treasuries sold, and the yield curve flattened a tad between 10/30’s. The market probably would have sold a bit more. For buyers of tips, widening inflation expectations will have a profound effect. For investors in the longer maturities, increased issuance and a widening deficit will figure strongly in any investment decisions. At this stage, the markets appear delicately poised.
