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Friday, 27 Apr 2018
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The Australian Dollar Tide

Here is a chart of the US 10 year bond yield.

The big debate is whether this is a “Big Low” in interest rates or simply the top of the trading range. The theory goes that a coordinated improvement in global growth will inevitably leads to inflation and higher interest rates. This is supportive of the US dollar and weakens the Aussie dollar, and, if it continues, is a very significant theme for tha Australian stock market.

The FOMC meeting next week is very unlikely to move US interest rates but there is an almost 100% percent chance of a rate rise in June, and there is a 50% chance of three more interest rate rises (making four) by the end of the year.

Sidenote: I’m not sure that official rates matter

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