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Aussie bond yield premium over US set to end
Monetary policies going in opposite directions, with the Fed planning to raise rates and RBA likely to lower them
Add BT as a preferred sourcePublished Sun, Dec 21, 2014 · 09:50 PM
Singapore
AUSTRALIA's bond yield premium over the United States will vanish for the first time since 2000 as monetary policy diverges, according to Goldman Sachs Asset Management.
The extra yield that Australia's 10-year bonds offer over similar-maturity Treasuries shrank to 64 basis points on Dec 17, the least since June 2006 and down from as much as 153 in March. The Federal Reserve said last week it is on course to raise borrowing costs in 2015, while traders have priced in at least one interest-rate cut from the Reserve Bank of Australia (RBA).
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