| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.489 | 3.433 | 0.056 |
| Australian 10-year bond (%) | 4.369 | 4.304 | 0.065 |
| Australian 30-year bond (%) | 5 | 4.943 | 0.057 |
| United States 2-year bond (%) | 3.994 | 3.862 | 0.132 |
| United States 10-year bond (%) | 4.439 | 4.377 | 0.062 |
| United States 30-year bond (%) | 4.8564 | 4.846 | 0.0104 |
LOCAL BOND MARKETS
Australia’s 10-year government bond yield rose to around 4.44% on Monday, reaching a more than four-week high, as the US-China trade deal boosted risk appetite across financial markets. Both nations agreed to reduce mutual tariffs for 90 days, alleviating concerns over a disruptive trade dispute between the two powerhouses and easing fears of potential economic fallout.
Domestically, Australia faces a busy week of economic releases, starting with Westpac’s consumer confidence survey for May and the NAB business survey for April, followed by home credit data and the latest labor statistics. These reports will precede the Reserve Bank of Australia’s decision next week, with investors still anticipating a 25bps rate cut to 3.85%.
US BOND MARKETS
The yield on the US 10-year Treasury note rose circa 7bps to 4.45% on Monday, its highest level in roughly a month, as risk appetite improved following news that the US and China agreed to substantially reduce tariffs. Under the 90-day agreement, the US will cut tariffs on Chinese goods from 145% to 30%, while China will lower levies on US imports from 125% to 10%. The announcement boosted investor confidence, signaling a serious intent on both sides to ease trade tensions.
Meanwhile, attention is shifting to key inflation data due this week, with CPI and PPI reports expected to offer insights into evolving price pressures and whether the effects of the tariffs are already filtering through inflation. Traders are now pricing in two 25 bps cuts to the federal funds rate this year, with the first likely in September, down from three rate cuts anticipated just a week ago.
