Commentary courtesy of Spectrum Asset Management’s Lindsay Skardoon.
| Close | Prev Close |
Change | |
| Aust. 90 day bank bill% | 1.85 | 1.82 | 0.03 |
| Aust. 3 year bond%* | 2.12 | 2.08 | 0.04 |
| Aust. 10 year bond%* | 2.81 | 2.73 | 0.08 |
| Aust. 20 year bond%* | 3.21 | 3.15 | 0.06 |
| U.S. 2 year bond% | 2.24 | 2.24 | 0.00 |
| U.S. 10 year bond% | 2.87 | 2.88 | -0.01 |
| U.S. 30 year bond% | 3.13 | 3.15 | -0.02 |
| * Implied yields from Mar 2018 futures | |||
LOCAL MARKETS
Bonds could be somewhat sluggish.
U.S. BOND MARKETS
Treasuries steadied and that probably because the fear of inflation has dissipated for the moment. The factors that will drive fear will be subtler and far more brutal. That will happen if the economy slows. The bond market will then have to contend with a falling dollar, decreasing tax revenues, increased debt issuance, a widening deficit and a decrease in bond purchases by central banks. That time may never happen but if it does, then the bond markets are in for a nasty period.
In Europe the bond market did a small about face. Bonds spiked as risk appetite in Europe continues to grow as confidence in the economy continues.
