| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.702 | 3.686 | 0.016 |
| Australian 10-year bond (%) | 4.38 | 4.372 | 0.008 |
| Australian 30-year bond (%) | 4.962 | 4.972 | -0.010 |
| United States 2-year bond (%) | 3.8831 | 3.887 | -0.004 |
| United States 10-year bond (%) | 4.1937 | 4.211 | -0.017 |
| United States 30-year bond (%) | 4.5611 | 4.578 | -0.017 |
LOCAL BOND MARKETS
Australia’s 10-year government bond yield hovered around 4.1% after the RBA kept interest rates unchanged as expected. The board noted that core inflation was cooling as anticipated but emphasized the need for assurance that this trend would continue.
The central bank also signalled a slightly dovish shift by removing references to caution on further easing. Governor Michele Bullock suggested the economy might be stronger than it appears, noting that there were no discussions about a May rate cut. While confidence in
disinflation is growing, she reiterated the need for careful policy management without committing to future rate moves.
On the data front, recent reports showed factory activity expanding at its fastest pace since October 2022, supporting the view of a resilient Australian economy.
US BOND MARKETS
The yield on the US 10-year Treasury note fell for the third straight session, dropping around 10 basis points to 4.13% on Tuesday, its lowest level since October last year. The decline came as investors flocked to safer assets amid growing economic uncertainty and market concerns.
The ISM Manufacturing PMI showed the US factory sector slipped back into contraction in March, while price pressures surged to their highest since 2022, driven by uncertainty and tariffs. Adding to the negative sentiment, the number of job openings dropped to 7.568 million, falling short of forecasts. In addition, markets remain on edge ahead of President Donald Trump’s announcement of his reciprocal tariff plan tomorrow, known as Liberation Day, with lingering concerns about its scope and economic impact. Some reports showed the Trump administration is considering tariffs of about 20% to most imports into the US although no final decision had been made.
More broadly, investors are worried that a year-long rally in global credit is ignoring the risk of a US recession due to policy uncertainty. Credit markets have not priced in much bad news, despite a selloff in other asset classes. Technical factors have masked the impact in credit markets, but some investors are taking a more defensive posture, citing risks such as trade tariffs and slowing growth.
