The twoyear bond spread ordsprog
The two-year bond spread has moved out in Australia's favor, which is one reason why the currency has done well.
Jonathan Prince
(
1958
-)
The overriding issue is that the 10-year bond yield moved very sharply in the last two weeks. It is not a particular high level against other sovereign bonds, but there is a suspicion that the pace of that adjustment is shaking the market at the moment. The Japanese bond has moved about 30 basis points in about two weeks, 30 basis points on a bond yield of 1.5% is a big move.
Edward Bonsor
The pendulum has swung against the bond market in favor of the economy, stocks, and spread products,
Tony Crescenzi
The spread curve is compressed enough -- you're talking about five basis points difference in the overall spread between two-year and seven-, eight or nine-year agencies, and a very flat Treasury curve, there's no reason to extend out for rates or spreads.
Jamie Jackson
I see the Australian dollar as a strong currency trading very cheaply. Australia is a commodity-based economy, so with stronger commodity prices the currency should do better.
Jonathan Barratt
The changes in the currency regime in China may sooner or later impact U.S. assets and the U.S. currency in favor of other geographical blocs and their assets such as Asian bonds.
Marino Valensise
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Kristy Hinze
Applåder
The RBNZ has been talking the currency down for over a year and certainly won't discourage further falls. A negative trend in the currency has taken hold and the presumption that the economy will struggle this year, without a much lower currency, will keep it trending lower.
Greg Gibbs
The reason for this tremendous shift towards greater transparency is because of the growth and dominance of the capital markets. The monetary policy impulse is now driven by how the bond market, stock market, currency market react, so now it is more important that those markets understand what the Fed intends.
Bill Dudley
(
1919
-)
The currency markets are particularly sensitive to this kind of news. Partly because when you buy a stock or buy a bond, you are buying a claim on a future earnings stream, some kind of money's coming to you in the future. When you buy a currency, you're buying confidence in a government.
Marc Chandler
There are other countries at the G20 that are aggrieved at the weakness of their currency against the dollar - Australia for one.
Steve Barrow
There's a lot going on. Next year is a really tough year for (Australia). We've got to win the gold medal. I love the WNBA. It just depends on what Basketball Australia's restrictions are.
Lauren Jackson
The best auction will be the long bond. We expect great demand from overseas accounts in the long bond specifically, as pension rules in Europe are much more strict than current rules in the U.S. and these rules favor bonds over stocks.
Andy Brenner
The major reason why the 10-year Treasury yield and the 30-year mortgage yield fell to near 30-year lows was because of pronounced weakness in overseas economies. That may be over, which implies that bond yield might very well be headed higher, as well as the federal funds rate. . . The sooner we get back on a normal course, the better.
John Lonski
If tomorrow's bond auction shows similar poor results, as both yesterday's five-year and today's 10-year have, expect a sharp drop in the bond markets as a whole, and the long-end in particular,
Tony Crescenzi
The impact of day-to-day changes in the yield spread remain significant for the Australian dollar. Some people are building in the case for a rate cut in Australia by year-end so that's clearly an issue for the Australian dollar.
John Rothfield
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