Free Trial
US TSYS

Late Risk Appetite Gathers Momentum

USDCAD TECHS

Fresh Bear Cycle Low

GLOBAL

Fiscal Tightening And Yield Curves

AUDUSD TECHS

Bullish Extension

EURJPY TECHS

Consolidating

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
AUSSIE BONDS
AUSSIE BONDS: Westpac write that "divergent monetary policy has been the major
driver of AU bond outperformance over recent years, with the Fed hiking and the
RBA either cutting or keeping rates on hold. This divergence remains the
dominant thematic, with Westpac continuing to expect stable rates in Australia
through 2020 while forecasting the Fed to deliver another 4 rate hikes. While
that view reflects the profile of the Fed's median "dot plot" for 2019, not
currently reflected in the 1yr forward AU-US cash spread. Should our forecasts
prevail, this strong relationship suggests that the spread will move to at least
-63bp in coming months. The spread has widened off its most narrow levels so,
now is an opportunity to re-set narrowers. Indeed, while AU bonds have
characteristically underperformed during the most recent UST rally, the spread
has in our view behaved quite well and in line with traditional relationships.
The trade is supported by relative supply trajectories throughout 2019 and by
any material correction to the AUD, which we expect, should also be supportive
for AU outperformance."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.