| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.775 | 3.81 | -0.04 |
| Australian 10-year bond (%) | 4.335 | 4.40 | -0.06 |
| Australian 30-year bond (%) | 4.892 | 4.95 | -0.06 |
| United States 2-year bond (%) | 4.0113 | 4.10 | -0.08 |
| United States 10-year bond (%) | 4.2348 | 4.30 | -0.06 |
| United States 30-year bond (%) | 4.5139 | 4.56 | -0.04 |
LOCAL MARKETS
Australia’s 10-year government bond yield rose to around 4.37%, rebounding from a three-week low as investors braced for a busy week. Key events included Q4 GDP, expected to show faster growth, along with January’s trade balance and retail sales report. Traders also awaited the RBA’s February meeting minutes for insights into its first rate cut in four years and its warning that further easing depends on inflation progress.
On the data front, the Melbourne Institute’s Monthly Inflation Gauge fell 0.2% in February, its first decline since last August, while ANZ-Indeed Australian Job Ads dropped 1.4%, marking the first decrease since November. In the US, the headline and core PCE price indices edged higher as expected, reinforcing market bets on two Federal Reserve rate cuts this year.
US MARKET
The yield on the 10-year US Treasury note fell to the 4.2% threshold on Monday, sinking 35bps in the last nine sessions as evidence of slowing economic activity magnified concerns that tariffs and lower government spending may hamper growth, driving investors toward government bonds. It is all risk-off and the ISM Manufacturing PMI only reinforced that.
The ISM Manufacturing PMI showed that new factory orders fell for the first time in four months, pressuring yields despite a surge in prices faced by the sector. This preluded the start of 25% tariffs for Canadian and Mexican goods to be enforced tomorrow, in addition to higher levies on China.
Growth concerns were also stoked by President Trump’s pledge to balance the US budget by the end of his term, despite current deficits ranging around the 7% to GDP mark, raising expectations of steep cuts to public expenditure and triggering sharp declines in Treasury yields. 