Markets Overview
- ASX SPI 200 futures up 0.7% to 7,385.00
- Dow Average up 1.8% to 33,916.39
- Aussie down 0.4% to 0.7098 per US$
- U.S. 10-year yield little changed at 2.8263%
- Australia 3-year bond yield little changed at 2.68%
- Australia 10-year bond yield rose 3bps to 3.08%
- Gold spot up 0.5% to $1,894.68
- Brent futures up 2.1% to $107.50/bbl
Economic Events
- 11am: (AU) Australia to Sell A$1 Billion 0.5% 2026 Bonds
- 11:30am: (AU) March Private Sector Credit MoM, est. 0.6%, prior 0.6%
- 11:30am: (AU) March Private Sector Credit YoY, est. 8.0%, prior 7.9%
- 11:30am: (AU) 1Q PPI QoQ, prior 1.3%
- 11:30am: (AU) 1Q PPI YoY, prior 3.7%
Australian government bonds look attractive to longer-term investors as markets are going too far in pricing in rapid interest-rate hikes for the central bank.
That’s according to Sally Auld, chief investment officer at JBWere Ltd., the private wealth arm of National Australia Bank Ltd., who says the securities are ripe for a rebound because global central banks will succeed in slowing growth to curb inflation.
“It makes sense for the market to price in something that’s steeper than the average tightening cycle,” Auld said in an interview. “But, when you look at that terminal rate at 3.5% in Australia, we think that’s probably too much.”
The nation’s sovereign 10-year bonds yielding above 3% and U.S. Treasuries at around 2.75% “look pretty attractive,” she said.
Global bonds are heading for their worst month since at least 1990, as the war in Ukraine adds to concerns that inflation will remain at multi-decade highs around the globe, forcing central banks to raise interest rates rapidly. Australia’s three-year bond yields climbed to 2.75% on Wednesday, the highest in more than seven years, after data showed core inflation surged above the top of the RBA’s target range.
Swaps traders are certain the RBA will raise its 0.1% cash rate target by 15 basis points next week and see a more than 70% chance policy makers will follow up in June with Australia’s first 50-basis-point increase since 2000. They are also pricing in a 2.5% rate by year-end, which would require the RBA to carry out the largest annual boost to borrowing costs in almost 30 years.
The surge in rate bets has driven bond yields up rapidly enough for them to offer decent returns across a five- to seven-year horizon, especially considering some of the risks to global growth emanating from both China and Europe, Auld said.
Auld cited China’s “much lower rate of growth in working age population, which means your trend GDP growth is falling over time. That’s a very different sort of environment for the global economy, particularly one where in most major economies’ central banks are about to really put their foot down in order to bring inflation lower.”
Other News
Now trending on Twitter: Twitter.
Twitter users have a lot to say about Twitter selling itself to Elon Musk for $44 billion. And they’re using Twitter to say it.
Many people are going on Twitter to swear that they won’t use Twitter. Others are threatening to quit Twitter, while another camp is betting that they won’t. Still others are making fun of those exiting the website known as part public square, part digital hellscape.
The often insular and usually self-referential community that is Twitter now comprises mostly people tweeting about their Twitter habits, to their Twitter followers. The hashtag #LeavingTwitter trended Tuesday. Discourse popped up in the niche Twitter worlds of #freedomtwitter, #climatetwitter, #higheredtwitter, #blacktwitter, #biketwitter — between the usual posts about Wordle, cute dogs and “GM” messages for crypto enthusiasts.
Twitter got its start in 2006 as a site that invited users to answer the question: “What are you doing?” Tech-savvy folks posted about their meals and other mundane things. Soon it went mainstream, attracting celebrities, politicians and even the pope.
Twitter has become embedded in the culture, a forum where media personalities, politicians, activists and tech aficionados help shape social discourse and provide real-time views of the problems of the day. It’s also become a place where good manners go to die and where one poorly worded tweet can generate days of mocking.
One person boasted Monday about quitting Twitter. Since then, the account has posted 16 times about Beyonce.
“So funny seeing people that are #leavingtwitter and then literally tweeting something about their favourite topic an hour later,” YouTube star and space enthusiast Marcus House tweeted. Within hours of that tweet, he was posting videos cheering a SpaceX launch.
Many Americans remember where they were during major historical events, like the ending of wars or election of a new president.”I’ll never forget where I was the moment that Elon Musk bought Twitter (I was on Twitter),” tech writer Casey Newton wrote.
Fears percolated about how Twitter would change and if it would become something else entirely. “I’ve had people ask me if I’m #leaving Twitter,” videogame journalist Eric Halliday said in a post, saying over Twitter direct message that he reluctantly planned to stay because he relies on it for work. But he wondered, was Twitter “basically gonna be LinkedIn 2?”
Carlo Salerno, an education economist, tweeted about the irony of the moment. “So meta that people are tweeting snark and derision to complain that the site is about to be filled with more snark and derision.”
Others cheered — or rather, liked and retweeted — news that the billionaire will take over the social-media giant and bid good riddance to naysayers, by using Twitter.
“If you’re leaving twitter just leave,” said another poster. “Nobody cares about you announcing your departure.”
The usual red/blue check divide broke out, of course. Florida Republican Sen. Marco Rubio lamented the “meltdown over the @twitter purchase,” while Massachusetts Democratic Sen. Edward Markey called for “algorithmic justice for internet users.”
Reactions to the Twitter deal were dwarfed by reactions to the reactions.
Comedian Mike Drucker, a writer for TBS late-night show “Full Frontal with Samantha Bee,” tweeted to his 212.4K followers that “people saying they’re going to quit Twitter have spent more time on Twitter today than ever before.”
“I feel seen,” someone replied.
Mr. Drucker also tweeted that “I’m never signing in again until five minutes later when I’m bored and open the app without thinking.”
Miscommunications, the lifeblood of Twitter, abounded. When Mr. Drucker received messages from strangers saying they were happy he was gone from Twitter for good, he realized many didn’t bother to read his entire tweet. “The whole point of the tweet was to say that I’m not actually quitting Twitter,” said the writer in a phone interview. “It was a one sentence tweet!”
Others imagined how many hot pockets, happy meals, Coca-Colas or Costco hot dogs $44 billion could get them.
Some reminisced. “What was your favorite day on twitter,” Marisa Kabas, a writer, asked her #tweeps.
Her followers began bonding over Twitter memes that have come and gone, and were obvious life moments to other consumers of Twitter memes.
“Rice truck thread day was very therapeutic,” said one poster about someone’s 2020 bulk order of rice that ended up being an entire truck of rice. Chimed in someone else: “The giant Okay FINE Dune WASN’T Funny But How Dare You Say It slapfight that in my corner somehow ascended into Metaphorical Pretzel Discourse was definitely up there.”
Quinta Brunson, creator, writer and star of ABC comedy show “Abbott Elementary,” summed up her feelings in a four-word tweet: “44 billion for this.”
Because Twitter is also a repository of every loose thought, Mr. Musk’s old tweets about Twitter have resurfaced. In July 2016, he tweeted: “I love Twitter.” Four years later, he wrote on Twitter: “Twitter sucks.”
Mr. Musk first offered to buy Twitter two weeks ago, which the company initially opposed, before having a change of heart. The two sides worked through the night Sunday into Monday on the deal.
Twitter employees used the app they’re paid to run to express their fatigue. One employee tweeted a photo of a tired-looking Kim Kardashian amid news that the Twitter-Musk deal was near closing.
Another tweeted a message to his mother: “Yes Mum, I have seen the news.”
