What does "priced out" mean?
It was used as follows,
"As rate cuts have been priced out of the Australian yield curve over recent months, the carry and roll-down of three- to five-year bonds have become much more compelling for investors globally, especially in an environment where the Reserve Bank of Australia will be required to keep rates lower for even longer."
Thanks.
Investor's have traded under the assumption that rate will not be cuts in Australia. They have "priced out" that assumption when trading. We see this by observing the yield curve, the yield curve tells us how people are positioned in the market, or how they are trading the rates.
Hope this makes sense, again I am just an equity guy and don't really understand all that fancy shmancy stuff ;)
Itaque necessitatibus nostrum tempora aut et. Amet sequi perferendis et fugiat molestiae. Sit est dolore vel neque. Eius blanditiis facere quibusdam. In quo excepturi ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...