While Australian sharemarket investors are rejoicing in the prospect of interest rate cuts, long-term bond rates are drifting higher.
This has been a very strange week in financial markets as global and domestic forces have tugged in opposite directions creating a few disconnects which might point to trouble ahead.
Here in Australia, the Reserve Bank delivered an expected cut but with a surprisingly cautious tone that suggested more cuts were coming. That was welcome news for the bond bulls as the three-year bond rate fell to 3.5 per cent.
Source: https://www.afr.com/markets/equity-markets/why-this-strange-week-for-markets-may-point-to-trouble-ahead-20250521-p5m130