 A bond view on matters Simon Michelle from fig live to the minute Simon welcome to you It was kind of a month-end thematic on the US team space overnight. So yields pushing lower You know the potential now for higher rates over this year What now it would say you to the currents offering on data that lends support to that or otherwise look at beige book Consumers spending softening wage growth moderate. Are you really kind of being torn several directions? Absolutely right Carson. Good afternoon, and it really seems that that data from the beige book is really moving away from where the Fed would like to see it We've seen inflation drift down to a level around but 1.5 percent We know the Fed likes to see that around 2% seeing a very soft consumer as well So we're not seeing a lot of consumer demand So, you know while we labor mart who looks very much where the Fed would like to see it both in relation to growth and in relation to inflation They're just finding those numbers just on the soft side. So while I continue to say that I think the June Increase is locked in I think what this means is, you know, we could see the rest of 2017 with no action by the Fed If this data continues to move away So it's certainly not where the Fed would like to see it and it's causing as you see out in the Space there commentators to start to question the or reassess the path forward for US rates There's the hue of deja vu about all this is they're not I mean Fed fund futures to your point now Yes, they've locked and loaded on June but effectively then scrubbing anything else until the new year So it does look eerily reminiscent. The only difference is that is the date so much as they are the you know the tenor That's absolutely right And I mean you're just a little bit further down the year this year than we were last year But looks interesting if you look at the curve in the US as well You know the two years only down about 10 basis point from its peak this year But the 10 year is almost approaching half percent lower than the peak we've seen So, you know as we drift closer to interest rate increases. You're actually seeing those long-term rates as you suggest moving lower You'd expect them to move in the other direction. So it looks interesting times What's it like you to do to the a dollar would you would be your suspicion say a six-month call? Yeah, well, this is interesting isn't it? I mean, you know if the Fed does stick to its path And you would suggest that US rates are going to be above Australian rates very soon at the margin at the moment Aussie currently about 19 basis points above the US When you look at the 10 year However, if we don't stick to that path then obviously, you know We could be in this tight narrow range right through to the end of the year Once those US rates do drift above the Aussie You would expect to see quite a bit of a sell-off of the Aussie dollar as people reposition Their exposure from Aussie bonds back into US and take advantage of that higher yield So there are certainly some concerns you're seeing commentators talking about the dollar, you know drifting down even into the 50s So that's certainly going to be something that people watching on a lot of volatility in the dollar today as you've said already And is there a house consensus on whether it's time to sell the bond proxies? If we look at the equity space and those stocks that do have that, you know, you know the telco the a reed Theme are you looking at more bias towards a sell on those now or hold tight? Well, this is the interesting thing We're actually seeing strong demand for both equities and bonds So, you know at the moment, I think people are having a bit of a bet each way You know, they're taking that offensive allocation in bonds We're still seeing demand pushing yields down there, but they're also happy to buy into to the equity market We're still seeing strong growth there at some point those levels are going to reach a point where they're going to make a decision One way or another you're either going to see rates, you know drift up on a continued upward path and Provide more return in the bond market or you're going to see a correction in the equity market Which is going to bring people back from the market in the equity market And that's what a lot of people are looking at the moment and trying to pick what time that's likely to occur Considering this volatility around that pathway forward for Fed rates ADP tonight your expectation finally Yeah, look, it's interesting isn't it? I don't know. I mean, I think you know, I haven't had a close look at it So, you know, I might leave that for everyone else if I may and if anything maybe look at the ISM gauge on jobs Are kind of coming through with that manufacturing release because that tends to track as we know more accurately the NFP release Which is slated to round out this week Yeah, look absolutely and I think you know the thing there as well is that you know We're seeing a bit of activity around the labor market, but I think look at the under-employment look at the wages growth You know until you start to see some activity in that, you know, people are going to be quite You know not really willing to buy into these the starter at the moment Watch and sit from the sidelines in the stalls thanking you Simon talk to you soon. Thanks Carson I'm Michelle from feed more