Australian dollar pounded by yield spread collapse

Monday 20 November 2017

The Australian dollar was flogged anew Friday night, briefly breaching the up trend line in the mid-0.75s:

The inversion of Australian and US interest rates is almost here. As of the close Friday the two year bond is down to 6bps. The five year is at new lows of just 12bps and the 10 year has halved in a month to 23bps:

It’s interesting to note that the US yield curve is crashing so fast that the Australian is now steeper, absurdly:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.