| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.774 | 3.815 | -0.041 |
| Australian 10-year bond (%) | 3.935 | 4.437 | -0.502 |
| Australian 30-year bond (%) | 4.417 | 4.994 | -0.577 |
| United States 2-year bond (%) | 4.0483 | 4.015 | 0.0333 |
| United States 10-year bond (%) | 4.2985 | 4.308 | -0.0095 |
| United States 30-year bond (%) | 4.5919 | 4.615 | -0.0231 |
* Implied yields from June 2024 futures. As at 4 June.
LOCAL MARKETS
Australia’s 10-year government bond yield rose to around 4.45% as investors continued to assess the Reserve Bank of Australia’s monetary policy outlook.
Recent strong economic data has dampened expectations of further rate cuts from the central bank. Australia’s annual GDP growth in the fourth quarter exceeded forecasts, marking its first acceleration in over a year, while the country’s labour market remains tight.
Moreover, in the latest RBA meeting minutes, the central bank signalled a cautious approach to future rate decisions, noting that it does not commit to additional reductions. However, yields remained under pressure amid worries about the potential impact of tariffs on global economic growth.
US MARKETS
The yield on the 10-year US Treasury note rose to 4.32% threshold on Monday, the highest in three weeks, lifted by a pro-inflationary data ahead of this week’s Federal Reserve decision.
Headline retail sales grew less than expected in February, but the sharp expansion in so called control group which strips out non-core sectors may reflect strong private consumption in the upcoming US GDP count. This was after the latest University of Michigan survey showed that inflation expectations rose to the highest in over two weeks reflecting that the aggressive set of tariff threats by President Trump may have already impacted spending patterns by households and businesses.
The Federal Reserve is largely expected to hold its rates unchanged on Wednesday, but the Summary of Economic Projections will show how policymakers weigh the pro-inflationary and growth-dampening nature of tariffs announced by the Presidential administration. Markets have priced in two additional rate cuts this year.
