The RBA is struggling to convince the market that rates will remain lower for longer with local 3-year bond yields now above 0.3%, triple the current cash rate and targeted target. Policy makers have reaffirmed their commitment to highly supportive monetary conditions until 2024 but bond yields are clearly suggesting the sugar fix for risk assets is running out of time. Most of the banks are no longer offering fixed price mortgages sub 2% for 4-years with the 3-year option likely to be on borrowed time, again a potential headwind on the horizon for stocks.
MM is bullish bond yields medium-term
