Australia money markets convinced of two 25bps rate cuts - Bloomberg
|Australia's money markets are convinced that the central bank would cut rates twice in the next 12 months amid worries about an economic slowdown.
Short-dated bond yields in particular have dropped sharply in the last few days on dovish RBA expectations. For instance, Australia’s 3-year bond yields have dropped almost 50 basis points since early December to within a whisker of the central bank’s 1.5 percent policy rate, according to Bloomberg report.
Also, the aggregate open interest for Australia’s 3-year bond futures has surged to a record high of 2.3 million contracts.
That said, the demand for short dated bonds may drop somewhat if the labor market report, scheduled for release this Thursday, shows the stellar run of jobs growth continued in February.
It is worth noting that jobs have remained a bright spot for the economy despite the worsening consumer and business sentiment.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.