Australian 3-year bonds have surged towards 1% through October but the RBA drew a line in the sand on Friday by buying $1bn worth of bonds in aggressive fashion to reassert its assurances that rates wont rise until 2024 – a big call but mortgage holders should be happy! This clear signal that the RBA is prepared to defend its target suggests that yields have run too hard too fast and we have tweaked our view back down to mildly bullish from current levels, at least into Christmas.
NB Buying bonds pushes the price up and hence their yield lower.
MM is mildly bullish Australian bond yields from current levels into 2022
