Economics
‘Is That a Typo?’ Australia Recoils at Record-Low Yields
- Bank profits will get walloped if RBA cuts to 0.5%: Goldman
- Country has potential advantages if it has to take the QE road
A man is silhouetted as he looks out at surfers at Bondi Beach as residential buildings stand in the background in Sydney, Australia.
Photographer: David Gray/BloombergThis article is for subscribers only.
Australia is about to reach its last percentage point of interest-rate ammunition, dragging the country’s economy and markets deeper into the low-yield world that’s already engulfed many of its developed-world peers.
Yields on the nation’s 10-year government bonds hit an all-time low 1.26% last week, more than a percentage point below where they started the year. The slide means every Australian bond -- out to the longest maturity of 2047 -- is yielding less than the bottom of the central bank’s 2-3% inflation target.