| Close | Previous Close | Change | |
|---|---|---|---|
| Australia 3-year bond* (%) | 3.83 | 3.95 | -0.12 |
| Australia 10-year bond* (%) | 4.20 | 4.33 | -0.13 |
| Australia 20-year bond* (%) | 4.50 | 4.63 | -0.13 |
| United States 2-year bond (%) | 4.80 | 4.72 | 0.08 |
| United States 10-year bond (%) | 4.38 | 4.34 | 0.04 |
| United States 30-year bond (%) | 4.51 | 4.50 | 0.01 |
* Implied yields from June 2024 futures. As at 16 May.
LOCAL MARKETS
Australian Commonwealth Government bond yields fell heavily along the curve, slightly outpacing the significant falls of US Treasury yields on Wednesday night (AEST). The only domestic data release for the day were April Labour Force figures.
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 4.03%, 29bps below the current cash rate, and thus one 25bp cut and a modest chance of another one between now and next May.
US MARKETS
Short-term US Treasury bond yields rose noticeably with longer-term yields rising by smaller amounts along the curve. Data releases included April industrial production, April housing starts, April building permits and weekly initial jobless claims.
The next FOMC meeting ends on 12 June. June federal funds futures implied an average cash rate of 5.32% for the month and thus a slim chance of a 25bp rate cut at the meeting. May 2025 contracts implied 4.54%, 79bps less than the current rate.
