Massive Flows Seen Into Australian Bonds

BlackRock Inc. is seeing massive flows into Australian government bonds from overseas as quantitative easing by central banks in Japan and Europe boosts demand.

There will be two more rate cuts this year by the Reserve Bank of Australia, Stephen Miller, the company’s Sydney-based head of Australian fixed income, said Wednesday at a briefing. The Aussie will fall to 70 U.S. cents by year-end, Miller said. That would be below the 75 cent level that central bank Governor Glenn Stevens has said would be preferable for the economy.

Stevens is facing pressure to act again after cutting the benchmark interest rate to a record 2.25 percent in February as the economy struggles with the collapse of a once-in-a-century mining boom and a slowdown in China, its biggest trading partner. Consumer prices rose at an annual 1.3 percent pace in the first quarter, below the 2 percent to 3 percent range the RBA aims for, the statistics bureau said Wednesday.


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