Regional FX & Fixed Income Strategy

We have closed out of our bullish New Zealand 10-year bond view at a gain of 18bps. While we still see yields falling over the medium term, the short-term picture is less clear.

  • We expect Australia's 2s-10s government bond curve to flatten over the coming weeks and months as the 2-year remains stable while expectations of a protracted deleveraging cycle put downward pressure on 10-year yields.

  • We are bearish 10-Year Japanese Government Bonds (JGBs). While we are down 2bps at present, we believe that the inflationist policies of the Abe administration bode ill for the country's bond markets over the medium term.

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