| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.806 | 3.759 | 0.047 |
| Australian 10-year bond (%) | 4.483 | 4.430 | 0.053 |
| Australian 30-year bond (%) | 5.050 | 4.991 | 0.059 |
| United States 2-year bond (%) | 4.021 | 4.017 | 0.003 |
| United States 10-year bond (%) | 4.354 | 4.317 | 0.037 |
| United States 30-year bond (%) | 4.703 | 4.663 | 0.040 |
LOCAL BOND MARKETS
Australia’s 10-year government bond yield rose to around 4.52% even as inflation data pointed to easing price pressures. Australia’s headline inflation eased to 2.4% in February from 2.5% in the previous month, versus forecasts for no change. Core inflation also fell to 2.7% from 2.9%. The data comes less than a week before the Reserve Bank of Australia’s next policy decision on April 1, where the central bank is expected to keep rates unchanged.
Meanwhile, markets currently see a 68% chance of a rate cut in May. However, the central bank has warned earlier that further monetary easing is not guaranteed, following its first rate cut in over four years last month. In other news, the Australian government on Tuesday announced two additional personal income tax cuts set for 2026 and 2027, totaling A$17.1 billion over the forward estimates.
US BOND MARKETS
The US 10-year Treasury yield rose to 4.355% on Wednesday, the highest in four weeks, reflecting growing investor uncertainty about the economy. Concerns about a potential recession are mounting, with expectations of an economic downturn in late 2025. Market sentiment has also been rattled by President Trump’s shifting tariff policies, raising fears of a global trade war that could slow US growth.
Weak economic data has added to the pressure—consumer confidence hit a 12-year low, and new orders for non-defense capital goods excluding aircraft, a key measure of business investment, declined for the first time in four months. Investors are now closely watching the upcoming PCE inflation report, which could influence Federal Reserve policy. If inflation remains stubborn, the Fed may delay rate cuts, further driving yields higher.
