Markets Overview
- ASX SPI 200 futures up 0.8% to 7,323.00
- Dow Average up 0.8% to 34,754.93
- Aussie up 0.3% to 0.7401 per US$
- U.S. 10-year yield fell 2.1bps to 2.1494%
- Australia 3-year bond yield rose 5bps to 1.93%
- Australia 10-year bond yield rose 7bps to 2.58%
- Gold spot down 1.1% to $1,921.62
- Brent futures up 1.2% to $107.93/bbl
Economic Events
- 11am: (AU) Australia to Sell A$400 Million 3.25% 2039 Bonds
Momentum toward higher yields has stalled in the world’s biggest bond market, underscoring how rapidly traders priced in the hawkish message delivered by the Federal Reserve.
The Treasury market selloff ended most dramatically in two-year notes, where yields peaked just below 2%, a level last seen in May 2019. Two-year yields have risen by nearly 50 basis points over the past two weeks and more than doubled from where they began the year — a much bigger move than has preceded previous Fed tightening cycles. More broadly, the subsequent pullback in yields reflects the view that the six additional rate increases the Fed has signaled for this year — combined with elevated inflation — will dent the economy.
Longer-dated yields rose less than the two-year’s and declined more from their peaks. In several cases they wound up lower than shorter-dated yields, a harbinger of recession. The eurodollar futures curve, a proxy for the direction of the Fed’s policy rate, peaks in September 2023 and declines from there, an implicit expectation that the Fed will be cutting rates by then to jump start growth.
The Fed’s aim is to bring inflation down without causing a recession. Its preferred inflation gauge in January was more than triple the central banks’ long-run target rate of 2%, and other measures of inflation such as the Consumer Price Index are higher still.
Chair Jerome Powell in his post-meeting news conference this week said the probability of a recession in the next year “is not particularly elevated,” judging by spending and labor market conditions, and that the economy “is very strong and well positioned to withstand tighter monetary policy.” Investors have doubts.
Other News
Everyone loves a hot cross bun and with Easter approaching the supermarkets are stocking up on the sweet treat.
Each year there are different flavours on offer – from chocolate, Marmite and cheese, blueberries – sweet or savoury, there’s something for everybody.
This year, there is one for those who can’t get enough of the sweet spiced bun – and if you head on down to Aldi, it’s fair to say you won’t miss it in the aisle…
Their NEW Specially Selected Giant Brioche Hot Cross Bun (£3.49, 600g) hits the shelves and their website on March 27 is so bun-believably big that even the woman with the world’s largest mouth has tried (and failed) to fit it in her mouth.
Don’t believe us?
Well, the Guinness World Record holder Samantha Ramsdell who has a mouth spanning an enormous 2.56 inches, attempted to get her impressive chops around the 8- inch treat – the biggest ever supermarket hot cross bun!
Attempting to tackle the gigantic bun, Samantha “@samramsdell5) shared the challenge with her 2.9 million TikTok followers, she showed the notable size difference between Aldi’s new Giant Hot Cross Bun to a normal-sized hot cross bun before attempting to scoff the sizeable Easter treat.
Samantha has previously gone viral by consuming a whole sandwich in one mouthful, so the pressure was certainly on for the Guinness World Record holder.
