The Wall Street Journal has an article today regarding Australian bonds. (note: this article is for paid subscribers)
Basically the article highlighted the woes Australia is currently facing which include:
- plunge in commodity prices.
- increase in unemployment.
- risk of a property bubble.
The Australian dollar has declined sharply against the US dollar while the yield advantage over US Treasurys is getting narrower. These in turn, are discouraging foreign purchases of Australian bonds.
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