Aussie bond yields plummet

By Christopher Hindmarsh
Updated December 5 2017 - 6:57am, first published 4:29am
Christopher Hindmarsh says Australian yields have also fallen with 10-year bond yields falling back down to around 2.55 per cent per annum.
Christopher Hindmarsh says Australian yields have also fallen with 10-year bond yields falling back down to around 2.55 per cent per annum.

We are moving through an interesting period for fixed income markets. Despite the strong macro-economic backdrop and the rise in equities, bond yields have fallen over the past month – likely due to the softer inflation prints recently and dovish commentary from the European Central Bank and Bank of England. Australian yields have also fallen with 10-year bond yields falling back down to around 2.55 per cent per annum. The market appears to now be accepting that the next move in Australian cash rates is up once unemployment falls to around the low 5 per cent level (from around 5.5 per cent currently) – a level that the RBA considers to be full employment below which they believe that wages and inflation begin to accelerate.

Get the latest NSW news in your inbox

Sign up for our newsletter to stay up to date.

We care about the protection of your data. Read our Privacy Policy.