| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.776 | 3.815 | -0.039 |
| Australian 10-year bond (%) | 4.476 | 4.507 | -0.031 |
| Australian 30-year bond (%) | 5.053 | 5.061 | -0.008 |
| United States 2-year bond (%) | 3.91 | 3.998 | -0.088 |
| United States 10-year bond (%) | 4.255 | 4.369 | -0.114 |
| United States 30-year bond (%) | 4.632 | 4.729 | -0.097 |
LOCAL BOND MARKETS
Australia’s 10-year government bond yield remained elevated at a five-week high of 4.51%, despite recent soft inflation data. Australia’s headline inflation eased to 2.4% in February from 2.5% in the previous month, while core inflation also fell to 2.7% from 2.9%. The data comes less than a week before the Reserve Bank of Australia’s next policy decision on April 1, where the central bank is expected to keep rates unchanged.
Meanwhile, markets currently see a 64% chance of a rate cut in May. However, the central bank has warned earlier that further monetary easing is not guaranteed, after its first rate cut in over four years last month. In other news, the Australian government on Tuesday announced two additional personal income tax cuts set for 2026 and 2027, totalling A$17.1 billion over the forward estimates.
US BOND MARKETS
The yield on the US 10-year Treasury note fell around 8 basis points to below 4.29% on Friday, pulling back from the one-month highs reached the day before. Growing concerns over the US economic outlook and the potential impact of the trade war continue to weigh on investor confidence.
Meanwhile, traders assessed key economic data, with personal spending rising slightly less than expected, while core PCE prices increased more than anticipated, signalling persistent inflationary pressures. New reciprocal tariffs are set to take effect next week on April 2nd. Traders continue to anticipate the Fed will reduce the fed funds rate by 25bps in July.
