The ten countries with AAA credit ratings
Australia's AAA credit rating has been placed in the spotlight amidst the current political uncertainty. The chart below shows the 10 countries that currently hold AAA credit ratings, the yield on 10yr bonds and the value of bonds outstanding. For me there are two things that really stand out. Firstly, the amount of money invested that is currently receiving zero or negative return highlights why equities remain attractive for many investors. Secondly, the yield on Australian bonds stands head and shoulders above similarly rated peers. You can see why Australian Bonds look so attractive and hence the remarkable resilience of the AUD. Political disfunction has the potential to weigh on consumer and business confidence and places a greater level of importance on the role of a lower dollar as the economy transitions. In the absence of clear leadership it is easy to see why the task of keeping the economy rolling remains firmly in the hands of the RBA and their interest rate policies.
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