Thursday 20th January 2021The sell-off of US bonds has halted, temporarily, but it continues in Europe, particularly in the UK where high inflation numbers will heighten the Bank of England’s resolve to raise rates next month. Canada also reported a higher-than-expected level of CPI, increasing the expectation for a rate rise there next week. In Germany, 10-year bund yields moved into positive territory for the first time since 2019. As NAB’s Gavin Friend says, it’s not just a US dynamic, as central banks attempt to grapple with inflation. But what of Australia? Labour numbers today are expected to show the unemployment rate fall to 4.2%. Given many parts of the world are seeing wage-push inflation, could we see prices rise faster than anticipated?

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