Even more signals for lower interest rates

The spread on 3 year Commonwealth Government Securities (CGS) and 2 year CGS has widened to 5 basis points; 1.82 per cent and 1.87 percent respectively as at 20^th April 2015. This indicates that fund managers prefer 3 year bonds to 2 year bonds as they foresee the cash rate being lower for longer on the back of Australian economic conditions continuing to deteriorate.