| Close | Previous Close | Change | |
|---|---|---|---|
| Australia 3-year bond* (%) | 3.86 | 3.92 | -0.06 |
| Australia 10-year bond* (%) | 4.44 | 4.51 | -0.07 |
| Australia 20-year bond* (%) | 4.99 | 5.04 | -0.04 |
| United States 2-year bond (%) | 4.17 | 4.19 | -0.01 |
| United States 10-year bond (%) | 4.40 | 4.41 | -0.01 |
| United States 30-year bond (%) | 4.66 | 4.67 | -0.01 |
* Implied yields from March 2025 futures. As at 8 January.
LOCAL MARKETS
Short-term Australian Commonwealth Government bond yields declined while longer-term yields rose moderately. Economic reports of note released on the day included the November CPI indicator and Q4 Job Vacancies.
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 very high probability of a third one between now and next December.
US MARKETS
US Treasury bond yields barely moved. Notable economic reports released on the day included November consumer credit figures and minutes of the FOMC’s December meeting.
The next FOMC meeting ends on 29 January. February federal funds futures implied an average cash rate of 4.315% for the month and thus a small probability of a 25bp rate cut at the meeting. December contracts implied 3.945%, 38bps less than the current federal funds effective rate.
