While the Reserve Bank of Australia (RBA) has largely tamed markets since then, as the economy’s recovery strengthens, wagers against the RBA’s ability to keep yields lower look poised to rise.
SYDNEY: Bond traders searching for a chink in the armour of central banks are starting to look Down Under, where a likely showdown over yield-curve control is set to test the power of policy makers to contain the next wave of reflation bets.
The global trading day for bonds begins in earnest in Sydney each morning, giving developments in Australia’s US$600bil (RM2.48 trillion) sovereign debt market an out-sized impact on sentiment. It was the scene of a dramatic “flash crash” last year when the yield programme was announced, illustrating the potential for turmoil.
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