 Here for more we're joined by Simon Michelle from fixed securities. Is that any astounding new revelation that they might increase rates mid-year Simon? Oh look not really. I think you know it's always really been around about that third quarter to be completely honest with you and I don't think that this change is too much. I think the big unknown factor is the launch of the European quantitative easing coming out this week as well. That's 60 billion euros of money hitting the global economy. That's going to be looking for a home as US rates climb higher. That's more attractive so you know I think a lot of that money will flow across to the US. I think as far as our economy is concerned the interesting thing is our yields have been pretty steady while US yields have been climbing. So it actually takes a bit of pressure off the RBA because that interest rate differential between our yields and the US is down to as little as 40 basis points in the 10 year. That was as much as one and a half percent this time last year. Simon just looking at that strong US jobs report we saw on Friday what sort of reaction did we see there in terms of bond prices? Yes so what we're saying happened over there is you know as investors move away from demand for US treasuries and expectation of rates moving higher we get those rates drifting higher bond prices drifting lower. So that's bringing in quite a bit of volatility in the long end of the curve and it certainly means that a lot of the investors that would be stepping up to buy US treasuries attend are probably going to stay a little shorter or stay away at this at this point and just wait to see what outcome they'll have on those yields. I'm interested by what you're saying in regards the ECB as you're saying starting what is it tonight I think European time is 60 billion euro a month bond buying program so you've got two major central banks seemingly working in completely opposite directions. I imagine that doesn't happen all that often. Look not at all not at all and the US is very much ahead of the curve on its improvement I suppose or its strength in the local economy and this is why I think you know we don't want to get too excited with the move by the US Fed because you know they are going to see continued pressure on their US dollar as a lot of that money moves out looking for positive yields. I mean most European yields are negative so you know if I have some money we invest I'm certainly not going to be investing in a European bank when I can invest in the US and get a good you know 1.6 percent over there. So you know there are still a lot of factors beyond the US Fed's control just as the beyond the RBA's control in relation to that continued quantitative easing both in the European zone and Japan as well. Is it to a level of concern the potential appreciation of the greenback there's no doubt the Fed expecting it to some degree when any decision to move rates high is likely to to put pressure there but if they've also then got the double whammy of the ECB movements adding further fuel to the fire would they be concerned that it could not cripple but sort of hamper some of the growth in particular some of their exporters have have done because that's really underpinned a lot of their growth. That's exactly right James I mean you're absolutely right it's been manufacturing driven export driven so you know the last thing they want to see is is you know pushing that US dollar up and making those industries uncompetitive and that's what we've been seeing with the central bank moves globally of falling rates it's really about protecting the currency it's really about adjusting your interest rates setting so you're not sitting too far above your other nations and and seeing too much inflows into your economy. That was really what drove the RBA's dropping rates in February they needed to bring them back down because there was just too much pressure on the dollar. You've seen that Paul back in the Aussie dollar as those US rates have drifted higher on the back of the jobs report and you know the RBA would be very happy with that. Simon just looking at that Aussie dollar I was speaking to our guest host earlier this morning John Noonan saying that it doesn't look like it's trending lower despite that price action looking seemingly vulnerable what what is your thoughts are you expecting it to trend lower? Look I think it will over time I think the RBA will certainly want to see it trend lower over time I mean look we still have very very high nominal rates as well and in fact I think out of the the AAA economies we have the highest rates so you know that's still significant pressure US yields moving higher lowering that interest rate differential does take a bit of pressure off and you know if that was to continue then that would certainly be a positive thing for the Aussie dollar and it would see it drift a bit lower but you know while we have these very very high rates in comparison to some of the other global economies it's a real challenge. Looking at those US yields climbing are you seeing any any movement in the spread between those Australian and US 10 year 10 year yields? Yeah look it's interesting I mean you know obviously Australia is seen as a smaller economy you generally get a better rate of return if you're investing into the Australian Commonwealth Government bonds as opposed to US Treasuries if you have a look a year ago the Aussie 10 year was one and a half percent above the US 10 years so that was a nice premium investors were happy to take that that's now 40 basis points so significantly tighter and lower so you know that's going to certainly see investors maybe prefer the US market as to the Aussie so that's taking a little bit of pressure off. Simon we'll leave it there but thank you so much for your time this morning. Good morning.