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NAB Look At Relative Inflation Curve Dynamics vs. U.S.

AUSSIE BONDS

NAB note that "the AUD inflation curve has flattened significantly in recent weeks as near-term breakevens have widened but there remains a dramatic difference in shape relative to the U.S. curve, which is entirely inverted. The AUD bond inflation curve is partly inverted, but this reflects very high carry related to last year's CPI prints lifting bond valuations. In contrast the relatively steep AUD inflation swap curve means that implied forward rates look extremely high in Australia relative to the U.S."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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