Meeting Of Minds – March 2019

Published on: March 28th, 2019

This week’s Meeting of Minds features the second part of Julian’s two-part series, RIP Corporate Capitalism and in Raoul’s Meeting of Minds piece, he focuses on Australia and suggests that we have reached the end of the long Australian boom.

Comments

  • JK
    James K.
    5 April 2019 @ 15:08
    Wouldn’t the falling currency wipe out any gains on the bonds? Or do you see the bonds as a shorter term trade vs the currency? Thanks
  • MB
    Matthias B.
    5 April 2019 @ 12:19
    hi Julian, rather unrelated to this piece but I am trying to find the one you once wrote about the yield curve impact after the various QE programs. It was a well written argument supported with various charts. I struggle to find it but thought that it was back in 2018, no? many thanks for your help! Matthias
  • TK
    Torbjorn K.
    31 March 2019 @ 23:42
    How can you profit from going long bonds when you expect them to go to 0%. Somebody please explain. Wouldnt shorting them be the way to go?
    • DD
      Donal D.
      1 April 2019 @ 04:35
      Torbjorn, The value of bonds is inversely related to interest rates thus as interest rates fall the value of the bond you are holding goes up. Take a look at a TLT chart over the past few months to see how it responded to the fall in interest rates.
    • TK
      Torbjorn K.
      1 April 2019 @ 07:45
      Thanks Donal D. The difference is that looking at the TLT it been climbing, however the 2yr and the 10yr aussie bonds broke down from a bearish pennant and seems to be headed even lower. I also try to find a way to get long Aussie bonds, however CMC dont seem to offer any. Other options anyone?
    • JQ
      JACK Q.
      1 April 2019 @ 07:55
      you can trade 3yr 10yr aussie bond futures on interactive. YT and XT
    • TK
      Torbjorn K.
      1 April 2019 @ 15:01
      Those are not an option in my trader account.
    • lD
      lance D.
      3 April 2019 @ 17:14
      But this relationship has decoupled a few times maybe some of John Murphy’s inermarket work could shed a little more light on TLT relationships (easy reading too)
    • lD
      lance D.
      3 April 2019 @ 17:20
      Also go BK a few months to Julian’s stuff about bonds ..and overlay with John Murphy i imagine you could get a lot out of that
  • NG
    Nicolas G.
    30 March 2019 @ 19:20
    Same here, cannot find a AUS govt. USD denominated bond (not sure if it even exists...).
    • BD
      Bryan D.
      1 April 2019 @ 07:09
      No they don't exist for the Commonwealth Government. Some of the states have previously issued them but the USD bonds have all matured.
  • DD
    Donal D.
    30 March 2019 @ 07:26
    If the longer term prognosis is for the A$ to devalue substantially then why is it a good idea to be buying A$ denominated bonds. I understand that rates will be cut thus increasing the price of the bond but surely this will be offset by a fall in the value of the currency. What am I missing here ? Thanks
    • WM
      Will M.
      30 March 2019 @ 14:52
      I was just about to ask exactly the same question Donal. I agree fully with Raoul's thesis but can see profits being significantly curtailed unless you were to somehow hedge against a A$ decline, cause it could be sharp.
    • JL
      J L.
      31 March 2019 @ 08:12
      buy the bonds short the currency
    • JL
      J L.
      31 March 2019 @ 08:41
      or simpler there's a future on 3Y and 10Y aussie bonds, tickers YT and XT on Interactive
    • RS
      Rajesh S.
      31 March 2019 @ 21:44
      Same question, how hedge the currency risk.
  • FK
    Firoze K.
    29 March 2019 @ 10:03
    Great piece thank you. Any suggested ETF for the Aussie bonds? I’m a UK based investor. Thanks.
  • MC
    Mark C.
    29 March 2019 @ 05:20
    What's the symbol for Australian gov bonds futures?
  • JK
    James K.
    29 March 2019 @ 02:14
    What about Gold/Silver metals & Miners in this environment? Thank you in advance.
  • SM
    Stuart M.
    28 March 2019 @ 16:31
    Interesting read - when thinking about the base case / game plan being an easing Fed & reflation trades, is buying bonds and wearing diamonds now off the table?