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RBA Step Down & Fed Pushback Against Pivot Sees AU/U.S. 10-Year Spread Hit 0

AUSSIE BONDS

The AU/U.S. 10-Year yield spread has been flirting with 0 in recent sessions, with the move away from cycle peaks accelerating in recent weeks given the RBA’s tilt towards and eventual slowing of the pace of rate hikes.

  • The U.S. Fed’s overpowering focus on the inflation side of its mandate and related continued pushback against the pivot narrative (via a higher for longer mantra) has also factored into spread dynamics and will likely keep pressure on any widening in the spread in the immediate term.

Fig. 1: Australia/U.S. 10-Year Yield Spread (%)

Source: MNI - Market News/Bloomberg

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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