Has the Fed turned dovish?

Roni Green from GF Asset Management discusses the recent dynamics in the bond markets. Roni highlights the impact of significant global incidents, such the invasion of Israel by Hamas which creates volatility in markets. He also investigates the repercussions of the wildly fluctuating oil prices and the corresponding American bond market responses, implying a volatile trading atmosphere.

Roni also analyses the effect of non-seasonally adjusted Nonfarm Payroll figures, which suggests that the headline numbers are not as strong and the markets are now pricing in rate cuts for 2024, as indicated by the move down in the US 2-Year Treasury yield.

He also explains the tightening mechanism in the US as the yield curve steepens. Unlike Australia where debt is more exposed to the cash rate, the US economy is more exposed to the longer dated Treasury yields and the recent bond sell off has tightening monetary policy.

Moreover, Roni accentuates the market's response to the Federal Reserve's more dovish stance with anticipations of potential rate reductions. Turning to the domestic corporate bond market, Roni explains the dynamics of the Brookfield takeover of Origin and the impact on their bond price.

Find the full unedited transcript of this interview below: