| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.861 | 3.918 | -0.06 |
| Australian 10-year bond (%) | 4.443 | 4.513 | -0.07 |
| Australian 30-year bond (%) | 4.993 | 5.038 | -0.04 |
| United States 2-year bond (%) | 4.168 | 4.192 | -0.02 |
| United States 10-year bond (%) | 4.393 | 4.42 | -0.03 |
| United States 30-year bond (%) | 4.649 | 4.669 | -0.02 |
LOCAL MARKETS
Australia’s 10-year government bond yield fell to around 4.49%, retreating from an over four-week high as investors await monthly inflation data for further guidance following the recent RBA policy announcement. January’s CPI is expected to hold at 2.5% year-on-year, its highest level since last August. Last week, the RBA cut the cash rate by 25 bps to 4.1% as expected but signaled caution on further cuts, warning that disinflation could stall. Governor Michele Bullock also emphasized that inflation remains a concern and that room for additional cuts is limited.
Markets currently see only a small chance of a rate cut in April. In the US, weak data last week raised concerns about the economy, potentially prompting the Federal Reserve to cut interest rates further. And the Australian market seems to be only tracking the US from start of year.
US MARKETS
The yield on the US 10-year Treasury note was little changed around 4.4% on Monday, the lowest level since mid-December, as traders weighed President Trump’s trade policies, fresh economic data, and the outlook for monetary policy. This week’s key focus will be the PCE report, which could offer further insights into inflation trends, while the second estimate of Q1 2025 GDP growth is expected to confirm a 2.3% annualized expansion.
Last week, flash S&P Global PMI data showed an unexpected contraction in the services sector, while manufacturing growth accelerated. However, input prices climbed, and business expectations weakened amid rising uncertainty over government policies. The data heightened concerns about the US economic outlook, leading traders to increase bets on potential Fed rate cuts.
