| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.37 | 3.362 | 0.008 |
| Australian 10-year bond (%) | 4.26 | 4.244 | 0.016 |
| Australian 30-year bond (%) | 4.965 | 4.96 | 0.005 |
| United States 2-year bond (%) | 3.935 | 3.975 | -0.04 |
| United States 10-year bond (%) | 4.413 | 4.436 | -0.023 |
| United States 30-year bond (%) | 4.9274 | 4.9285 | -0.0011 |
Overview of the Australian Bond Market
On Tuesday, 17 June 2025, the Australian bond market experienced modest gains amid ongoing economic uncertainty and expectations of further monetary easing by the Reserve Bank of Australia (RBA).
Key Highlights are the Bloomberg AusBond Composite 0+ Yr Index rose 0.16%, reflecting a mild rally in bond prices.
The RBA recently cut the cash rate to 3.85%, signaling a more accommodative stance. Markets are pricing in an additional 90 basis points of easing, with expectations that the rate could fall to 2.85% over time.
Among Short-Term Yields: 3-month bank bills dropped 15 basis points to 3.73% and 6-month bank bills fell 11 basis points to 3.77%.
For government bond yields: 3-year bonds ended slightly higher at 3.33%, 10-year bonds rose 9 basis points to 4.26% and 30-year bonds surged to 4.96%, the highest in nearly two months.
Volatility remains elevated due to global trade tensions and geopolitical developments. However, stabilizing inflation and improving manufacturing indicators are offering some support to bond markets.
Overall, the bond market is reflecting cautious optimism, with investors balancing expectations of further rate cuts against persistent global uncertainties.
Overview of the US Bond Market
U.S. Treasury yields fell Tuesday. The yield on the benchmark 10-year Treasury note declined to 4.39%, down from 4.45% Monday. The moves on Tuesday pushed yields lower by two to nearly seven basis points across the curve following mixed retail sales data for May and a solid auction of inflation-protected securities. The rally gathered pace later in the session, supported by risk-aversion as US stocks declined amid concerns over escalation of the Middle East conflict.
The two-year rate, most sensitive to Fed policy shifts, fell two basis points to 3.95%, while the 10-year yield dropped six basis points to 4.39%. A $23 billion reopening of five-year Treasury inflation protected securities was awarded at 1.650%, slightly lower than the indicated level before the 1 p.m. New York time bidding deadline. Demand for the sale was bolstered by a lower breakeven inflation rate and the recent surge in oil prices.
The US Treasury market has risen 2.3% so far this year, according to a Bloomberg gauge. While yields on 10-year notes have whipsawed during this period on President Donald Trump’s evolving trade policies, they’re now down just 16 basis points so far in 2025.
Signs of economic weakness also weighed on investors Tuesday, after data showed U.S. retail sales declined more than expected last month, shrinking 0.9% from April, or 0.3% if vehicle sales are excluded.
The value of retail purchases, not adjusted for inflation, decreased 0.9%, the most since the start of the year and restrained by autos, Commerce Department data showed Tuesday. That followed a downwardly revised 0.1% drop in April, marking the first back-to-back decline since the end of 2023.
In the retail sales report, seven of the 13 categories posted drops, dragged down by building materials, gasoline and motor vehicles — which came after a buying spree in anticipation of tariffs. Spending at restaurants and bars, the only service-sector category in the retail report, fell by the most since early 2023.
Other data out Tuesday pointed to cooler demand across sectors of the economy. Industrial production decreased in May for the second time in three months, reflecting weaker utility output and soft manufacturing. Confidence among homebuilders in June slumped to the lowest since the end of 2022, as would-be buyers stay on the sidelines.
