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We expect loose monetary policy to keep a lid on bond yields

The RBA’s decision earlier today to extend its bond purchases, despite considerable improvement in the economic outlook, is just the latest sign that major central banks are likely to take a much more cautious approach to tightening monetary policy than they did in the past. This supports our view that the yields of 10-year developed market (DM) government bonds won’t rise much between now and the end of 2022.

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