So far the sudden creep up in the Australian 3 year yield has gone unnoticed. But it has jumped massively in the last two weeks from 0.07% to 0.26%
For months the RBA has kept the rate under 0.10%. However, this time it has left the rate unchecked.
According to Michael West, this is the RBA testing the market. The three year rate is the rate that Banks use to lend to home owners and this is about taking the heat out of the property in an election year.
However, in it's just published minutes (1 June) the bank has confirmed its decision of " a target of around 0.1 per cent for the yield on the 3-year Australian Government bond"
So is this a shorting opp? With the rates about to get squashed.