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Australian government bonds to outperform US Treasuries

Our forecasts that interest rates in Australia will remain low for longer than the markets expect while rates in the US will rise further than widely believed are consistent with government bonds in Australia outperforming US Treasuries. While Australian 10-year bond yields may edge up from their recent record low of 2.3% to 2.5% next year, US 10-year yields will probably climb from 1.9% to 3.0%.

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