| Close | Previous Close | Change | |
|---|---|---|---|
| Australia 3-year bond* (%) | 3.93 | 3.89 | 0.04 |
| Australia 10-year bond* (%) | 4.58 | 4.52 | 0.06 |
| Australia 20-year bond* (%) | 5.00 | 4.95 | 0.05 |
| United States 2-year bond (%) | 4.38 | 4.26 | 0.12 |
| United States 10-year bond (%) | 4.76 | 4.69 | 0.07 |
| United States 30-year bond (%) | 4.95 | 4.93 | 0.02 |
* Implied yields from March 2025 futures. As at 10 January.
LOCAL MARKETS
Australian Commonwealth Government bond yields moved moderately higher. Economic reports of note released on the day were limited to November household spending figures.
The next RBA Board meeting ends on 18 February 2025. February futures implied an average cash rate of 4.27% for the month, thus pricing in a good chance of a 25bp cut at the meeting. December futures implied 3.605%, 73bps below the current cash rate, thus inferring two 25bp cuts and a high probability of a third one between now and next December.
US MARKETS
Short-term US Treasury bond yields jumped while longer-term yields moved higher in a more-moderate manner. Notable economic reports released on the day included December non-farm payroll figures and the January reading of the University of Michigan’s consumer sentiment index.
The next FOMC meeting ends on 29 January. February federal funds futures implied an average cash rate of 4.32% for the month and thus a small probability of a 25bp rate cut at the meeting. December contracts implied 4.065%, 27bps less than the current federal funds effective rate.
