The bond market has been stunned by the latest speeches of the various Reserve banks.
The European bank was pro rising rates. Canada surprised with a hintn of rate rise increase (and as per previous post Canada is really similar to Australia).
The Fed is in the rising path and the Bank of England had full on dissenters in his last meeting where it kept the rates stable.
On top of this an ex member of the RBA yesterday say that, if the economy is good, the RBA could increase 8 times between 2018 and 2019.
This is a major shift – all the accommodative policies that favour the share market and real estate are winding down.
A misstep could really crash the market – the Central Banks need to be really alert on what they are doing. I am not bearish, but we are in a minefield.
The Australian real estate market (and with it the Aussie banks) is in full on danger as the Australian bank takes their loans from overseas.
My personal idea is that they will not succeed to increase much the rates, but everything is changing.
