| Close | Previous Close | Change | |
|---|---|---|---|
| Australia 3-year bond* (%) | 3.93 | 3.93 | 0.00 |
| Australia 10-year bond* (%) | 4.27 | 4.30 | -0.03 |
| Australia 20-year bond* (%) | 4.56 | 4.60 | -0.04 |
| United States 2-year bond (%) | 4.94 | 4.87 | 0.07 |
| United States 10-year bond (%) | 4.48 | 4.42 | 0.06 |
| United States 30-year bond (%) | 4.58 | 4.54 | 0.04 |
* Implied yields from June 2024 futures. As at 23 May.
LOCAL MARKETS
Long-term Australian Commonwealth Government bond yields fell moderately while short-term yields finished unchanged, unlike the generally-upward movements of US Treasury yields on Wednesday night (AEST). The Melbourne Institutes’s May inflation expectations report was the only notable domestic data posted.
The next RBA Board meeting ends on 18 June. June futures imply an average cash rate of 4.31% for the month and thus a small probability of a 25bp rate cut at the meeting. May 2025 futures imply 4.095%, about 24bps below the current cash rate, and thus nearly one 25bp cut is currently priced in between now and next May.
US MARKETS
US Treasury bond yields rose along the curve, with short-term yields outpacing longer-term yields. Data releases included May S&P Global manufacturing PMIs, April new home sales, weekly initial jobless claims and a couple of regional Fed activity indices.
The next FOMC meeting ends on 12 June. June federal funds futures implied an average cash rate of 5.325% for the month and thus almost no chance of a 25bp rate cut at the meeting. May 2025 contracts implied 4.705%, 63bps less than the current rate.
