Australian 3-year bond yields dipped under 0.2% yesterday and are threatening to test multi-month lows. With the RBA looking to anchor yields to 0.1% until 2024 we may see bonds tread water for a while but its our view that the next move is up unless the economy surprises MM and slips back into a recession. From a risk / reward perspective we are an advocate of buying bond yields (selling bonds) for the patient investor i.e. its now less than 0.1% to the RBA’s target compared to now sitting almost 0.3% below Junes high, just before the Delta strain raised its head.
MM is bullish bond yields medium-term
