Summary:
The Bank Bill Swap Rate (BBSW) market remained stable this week, reflecting a balanced response to the RBA’s decision to hold the cash rate at 3.85%, weak employment data in Australia and somewhat mixed macro data from the US. For the week ending July 25, 2025, the 1-month BBSW held at 3.70%, while the 3-month BBSW stayed at 3.69%, based on daily data trends. The 6-month BBSW dropped slightly to 3.75% from 3.76%, indicating a flat short-end yield curve amid tariff concerns, mixed macro and price data and market anticipation of an August rate cut.
The longer end of the swap rate curve steepened during the week, with the 1-year swap rate up 8 basis points to 3.41%. The 3-year swap rate increased 9 basis points to end the week at 3.41%. The 5-year swap rate increased 6 basis points to 3.80%, reflecting investor expectations of a revised cash rate path for Australia following the RBA’s surprise decision to pause rate cut earlier during the month and uncertainties around US tariffs.
Bank Bill Swap Rates
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 month 3.695 -0.075 0.0225 3 months 3.69 -0.02 0.04 6 months 3.7488 -0.0149 -0.0349 SWAP RATES
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 year 3.4122 0.0814 0.1701 3 years 3.4138 0.0893 0.2131 5 years 3.8055 0.0579 0.2123 10 years 4.2618 0.0178 0.2073 15 years 4.4978 0.0026 0.2165
Exhibit 1: Australian 3Y/10Y Bond Yield
