Why the Global Bond Selloff Is Likely to Resume

The video discusses the Australian 10-year government bond yields in comparison to other countries, highlighting the tight bond spreads with the US and the impact of global policies on these spreads. It explores the influence of international investor inflows, particularly from Japan, on the Australian bond market. The Reserve Bank of Australia's (RBA) monetary policy stance is examined, with expectations of holding interest rates steady due to low inflation. The video also addresses the impact of banking regulation on credit markets and liquidity conditions post-GFC.

What is a key reason for the lack of yield premium for international investors in Australian bonds?

• High inflation rates in Australia

• Decreased interest rates in the US

• Global policy changes compressing bond spreads

• Increased demand for Australian bonds

How have Japanese and European investors influenced the Australian bond market recently?

• By causing a decline in the Australian dollar

• By increasing the interest rates in Australia

• By decreasing the demand for Australian bonds

• By making Australian bonds more attractive due to yield sell-offs

What is the current stance of the RBA regarding interest rates?

• They are planning to cut rates soon

• They are likely to hold rates steady

• They are increasing rates rapidly

• They are undecided about rate changes

What is a major risk factor for the credit markets this year?

• Deregulation in the banking sector

• Rising unemployment rates

• Increased government spending

• High inflation rates

How have liquidity conditions in the local fixed income market changed post-GFC?

• They have improved significantly

• They have remained the same

• They have become more volatile

• They have deteriorated