It’s been a big week for global bond markets. US bond yields sold off heavily and the US dollar strengthened following the release of data that continues to show the US economy is booming. And a booming economy generally means higher inflation and a potentially more aggressive US rate hikes. US bond yields sit at multi-year highs and the AUD has fallen a cent and is at a two year low.
Last week’s RBA monthly board meeting came and went without any fanfare as far as the market was concerned. Something the RBA would have been more than contented with given its desire to hold the official cash rate steady and do its bit to maintain market stability. The last move in the official cash rate was a 25 basis point cut in August 2016; that followed a 25 basis point cut in May of that year. There was again no change from the RBA last week and conversely minimal market reaction once again.