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Feb 01

RBA Rate Rise tomorrow? Odds on

Australian Government Bond Yields – 29 Jan 2010

Source: Bloomberg
The RBA Cash rate is currently at 3.75% and with government backed 30 day bank bills at 4.12% and the recent tender of 23 March 2010 Treasury Notes fetching a yield of ~3.96% the financial markets are pretty much expecting a 25bps increase.
Whilst the sharemarkets have had the jitters whereby the ASX200 has dropped in excess of 6% this year, it is only government bond with a maturity greater than 1 year whose yields have dropped. The shorter term rates haven’t dropped much at all as the market continue to believe that 2010 will be a year of rising RBA rates.
As for the chart above…it doesn’t really reflect too much of what I’ve said and actually contradicts the 3 month rates I quoted earlier…my only comment is…what’s going on with Bloomberg such that it quotes 3 month Treasury Notes at 3.75%??? Might be best to double check rates from different sources before accepting them.
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