Australian 10-year yields have fallen to a record low 2.51%, down a whopping 16 basis points today.

Given that Europe is a no-go zone, Japan is scary and the US is overcrowded, why not Australia? Money is flowing there and it was a pretty good day for the Aussie despite a brutal day for risk assets.

AUD/USD looks like it will hold 0.8000 and that opens the way to a larger rebound.

The flipside is that the 2.50% level is important because that’s the RBA’s benchmark overnight rate. Ten-year yields falling below the overnight rate is an extremely rare occurrence and in some ways is the ultimate inversion of the yield curve and that’s a scary sign. The last time it happened was in mid-2012. The Australian dollar cratered at the time but rose more than 1000 pips in the next few months.