| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.81 | 3.86 | -0.05 |
| Australian 10-year bond (%) | 4.40 | 4.44 | -0.04 |
| Australian 30-year bond (%) | 4.95 | 4.99 | -0.04 |
| United States 2-year bond (%) | 4.10 | 4.17 | -0.07 |
| United States 10-year bond (%) | 4.30 | 4.39 | -0.09 |
| United States 30-year bond (%) | 4.56 | 4.65 | -0.09 |
* Implied yields from March 2025 futures. As at 29 January.
LOCAL MARKETS
Australia’s 10-year government bond yield continued its decline to around 4.46% as investors turned risk-averse amid rising global trade tensions. President Donald Trump on Monday indicated that proposed tariffs on Mexico and Canada would proceed next week, disappointing markets who had hoped negotiations would prevent them. This dampened sentiment toward the Australian economy, which relies on resource exports and is sensitive to the risk of a global trade war.
Domestically, investors are awaiting monthly inflation data for further guidance following the Reserve Bank of Australia’s recent policy announcement. The RBA cut the cash rate by 25 bps to 4.1%, as expected, but struck a cautious tone on further cuts, warning that disinflation could stall. Markets currently see only a small chance of a rate cut in April.
US MARKETS
The yield on the US 10-year Treasury note fell 10bps to 4.3% on Tuesday, its lowest level since mid-December, as declining consumer confidence and escalating trade war concerns drove investors toward safe-haven assets.
US consumer confidence fell this month by the most since August 2021 on concerns about the outlook for the broader economy, adding to evidence that uncertainty over the Trump administration’s policies is weighing on households. The drop in confidence was broad across age groups and incomes. Consumers were more pessimistic about current and future labour-market conditions, as well as the outlook for incomes and business conditions. Perceptions of present and future financial situations worsened, and the share of respondents expecting a recession in the next year rose to a nine-month high.
President Donald Trump signalled that tariffs on Mexican and Canadian imports, previously paused for a month, will take effect next week, while reports indicated the US is tightening restrictions on China’s chip industry and pressuring other governments to follow suit.
