After the Reserve Bank of Australia (RBA) Chairman Philip Lowe recently announced an increase of the benchmark interest rate to 4.6%, a 15-year high, the market broadly expects that this hiking cycle is nearing its end. Large institutions such as Schroders and Franklin Templeton have begun actively buying 2- to 3-year Australian government bonds.
This move suggests that the marginal impact of the tightening cycle is diminishing. With the unemployment rate near a five-year high and the housing market continuing to cool, the central bank lacks macro support for further major tightening, and signals of a policy pivot are becoming increasingly clear.
In traditional financial markets, the effective relief from the liquidity-draining effect on fixed-income assets has come from the cap and subsequent decline in government bond yields. The upward momentum in the U.S. dollar index and global borrowing costs has weakened, providing favorable technical support for valuation repairs in risk assets.
For the crypto market, improvements at the margin in global liquidity expectations are often a leading indicator for the start of a rally. As macro tightening pressure fades, investors’ risk appetite is expected to rebound significantly, and $BTC could see a new round of liquidity-driven, high-volume rebound.📈
#MacroEconomics #InterestRates #BondMarket
This move suggests that the marginal impact of the tightening cycle is diminishing. With the unemployment rate near a five-year high and the housing market continuing to cool, the central bank lacks macro support for further major tightening, and signals of a policy pivot are becoming increasingly clear.
In traditional financial markets, the effective relief from the liquidity-draining effect on fixed-income assets has come from the cap and subsequent decline in government bond yields. The upward momentum in the U.S. dollar index and global borrowing costs has weakened, providing favorable technical support for valuation repairs in risk assets.
For the crypto market, improvements at the margin in global liquidity expectations are often a leading indicator for the start of a rally. As macro tightening pressure fades, investors’ risk appetite is expected to rebound significantly, and $BTC could see a new round of liquidity-driven, high-volume rebound.📈
#MacroEconomics #InterestRates #BondMarket