| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.76 | 3.76 | 0.001 |
| Australian 10-year bond (%) | 4.398 | 4.398 | 0.021 |
| Australian 30-year bond (%) | 4.957 | 4.957 | 0.036 |
| United States 2-year bond (%) | 4.037 | 3.948 | 0.089 |
| United States 10-year bond (%) | 4.331 | 4.252 | 0.079 |
| United States 30-year bond (%) | 4.656 | 4.597 | 0.059 |
Summary –
LOCAL BOND MARKETS
Australia’s 10-year government bond yield climbed to around 4.45% as robust private sector activity data reinforced the RBA’s restrained approach to monetary policy. In March, the manufacturing sector saw its fastest expansion in over two years, while services sector growth also picked up.
This follows strong GDP data earlier in the month, with both annual and quarterly figures surpassing forecasts. The solid economic performance aligns with the RBA’s hawkish signals last week, with Assistant Governor Sarah Hunter reiterated that the central bank remains more cautious than markets on further rate cuts, while emphasizing the need to monitor US policy decisions and their potential impact on Australian inflation.
Rate cut expectations remain divided, with some analysts anticipating a move as early as May, while others foresee it happening in July or August.
US BOND MARKETS
The yield on the US 10-year Treasury rose over 6 basis points to 4.31% on Monday, reaching its highest level in more than a week, as traders closely monitored trade policy developments and assessed key economic data.
Reports indicated that President Donald Trump’s upcoming wave of tariffs is expected to be more targeted than his previously threatened broad measures, fuelling hopes that the new US tariffs set to take effect on April 2nd may be softer than initially anticipated.
Meanwhile, flash S&P Global PMIs showed a sharper expansion in the services sector for March, while manufacturing slipped back into contraction territory, with input prices rising sharply due to tariff impacts. Traders are currently pricing in two quarter-point Fed rate cuts this year, in June and September, with growing odds of a third cut in December.
