Since the 2008 crisis, this correlation has been systematically negative due to drastic non-standard measures with a few exceptions (Fed’s tapering in 2013 and the Bund tantrum in 2015, during which bonds and equities prices abruptly corrected). In my view, the bond-yield/equity market correlation will remain negative as a trend once more this year, albeit less pronounced and more volatile (Figure 12).
The third development has been the continuation of little net capital flows either to or from the banking sector, but, within that, a notable change in the composition of the investor base, particularly for short-term debt. 1 See Belkar R, L Cockerell and C Kent (2007), ‘Current Account Deficits: The Australian Debate ’, RBA Research  Discussion Paper No 2007–02.