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- Australia’s central bank is concerned riskier assets such as stocks and high-yield corporate debt could be set for widespread losses if there is a sudden increase in government bond yields.
- The bank warns current asset valuations, which are reliant on global bond yields staying low, are “elevated relative to history.”
- In addition, it says returns for holding many risk assets have fallen to record low levels.
Australia’s central bank is concerned riskier assets such as stocks and high-yield corporate debt could be set for widespread losses if there is a sudden increase in government bond yields.
The Reserve Bank of Australia says years of ultra-easy monetary policy from major central banks have seen government bond yields fall to unprecedented levels, at least for modern times, helping to boost asset prices further out the risk spectrum and encourage risk-taking among investors.See the rest of the story at Business Insider
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