Australia’s Yield Curve Inverts in Warning Sign for Recession
- Move is led by rise in short term government bond yields
- RBA kept hawkish bias, worried about labor costs, inflation
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Australia’s yield curve inverted for the first time since the financial crisis as traders increasingly priced in the risk of a recession.
The gap between yields on 10- and three-year government bonds fell as low as minus two basis points on Thursday for the first time since 2008. The move was led by a rise in short term yields after Australia’s jobs report came in better than expected.