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Australia Supercharges Market Debate That Peak Rates Are Near

  • Dovish surprise from RBA adds fuel to Treasuries rally
  • Central bank raised rates less than expected Tuesday
Updated on

Global stock and bond bulls are hoping the market impact of Australia’s dovish rate surprise will stick as it offers their best chance at arguing the worldwide wave of disruptive hikes is closer to the end than the beginning.

Yields on rate-sensitive three-year Australian government bonds plunged by the most since 2008 after the central bank raised interest-rates by a less-than-expected 25 basis points. The unexpected move ricocheted around global financial markets, giving a fresh boost to the rally in Treasuries, pushing New Zealand yields lower and helping turbocharge a rally in Japanese equities.