It was one of the rare weeks where there was a dearth of major economic data or pronouncements. There were some reports; weekly initial jobless claims in the US, UK February CPI figures as well as sundry other bits and pieces but it really was a nothing week in terms of data. The only thing of any real (economic) note was the increasing hawkish comments coming from US Fed officials, including some known moderates such as Atlanta Fed president Dennis Lockhart. Both he and another Fed president reiterated Yellen’s statement about April being a “live meeting” from a rate increase point of view.
Locally, we had the government announce the date for the budget and a possible double dissolution trigger and these added to the reasons for traders to do nothing. The Brussels bombings occurred mid-week and initially bond yields rallied lower in a ‘flight to safety’. The initial moves were reversed quite quickly though as markets sadly become used to digesting such terrible news.
European markets reacted to the Brussel incidents by buying government bonds but US markets did not view the news as anything of threat to the US economy and sent yields higher. Australian bond yields usually follow their US counterparts and, as US yields went up, so did yields in Australia. German and French 10 year yields went lower by 3bps to 0.18% and 0.53% respectively. The UK may be getting accustomed to not being part of Europe as their 10 year bond yields remained stable.
There was a tender for April 2026 during the week that was keenly sought with the sale price that was 0.59% below the midpoint of trading prior to the tender. The cover ratio was 2.57x. Unusually, the action all appeared to be in the semi government bond market.
AUST GOVT BONDS
|Δ WEEK||Δ MONTH||WEEK |