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%* | 2.14 | 2.16 | -0.02 |
| Aust. 10 year bond%* | 2.87 | 2.91 | -0.04 |
| Aust. 20 year bond%* | 3.31 | 3.33 | -0.02 |
| U.S. 2 year bond% | 2.11 | 2.07 | 0.04 |
| U.S. 10 year bond% | 2.83 | 2.86 | -0.03 |
| U.S. 30 year bond% | 3.11 | 3.14 | -0.03 |
| * Implied yields from Mar 2018 futures | |||
LOCAL MARKETS
Bonds had a reasonable day yesterday and should look to consolidate on the day. With a lot riding on Wednesday’s inflation print in the U.S. many positions are likely to be wound back on the day. Bonds are vulnerable to drifting higher in yield.
U.S. BOND MARKETS
The bond market managed a rally of sorts. The trading day has been quiet so far. The economists are expecting a 0.3% rise in inflation in January and a core figure of 0.2%. The day has seen the yield curve flatten quite sharply between 2-years and 30-years.
