Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUSSIE BONDS
Over the past couple of months, there have been two episodes of a noticeable reduction in the cross-market curve correlation between Australia and the US. Those episodes suggested a focus on domestic drivers rather than US and global factors.
- In both instances, the dips in correlation can be attributed to higher-than-expected CPI prints in Australia. The first occurred in late April, coinciding with the release of Q1 CPI, while the second was linked to the May CPI Monthly release.
- Similar to the late April episode, the most recent dip was short-lived, with the cross-market correlation between the cash AU 3/10 and the US Treasury 2/10 curves quickly returning to the upper end of its range for the year.
- However, considering that global curve correlations tend to weaken as global policy tightening matures and policy rates diverge into their respective easing cycles, the current level may also prove to be fleeting.
Figure 1: Rolling 10-day Correlation – ACGB 3/10 Curve Vs. US Tsy 2/10 Curve
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok