| Close | Previous Close | Change | |
|---|---|---|---|
| Australian 3-year bond (%) | 3.862 | 3.863 | -0.001 |
| Australian 10-year bond (%) | 4.482 | 4.468 | 0.014 |
| Australian 30-year bond (%) | 4.986 | 4.987 | -0.001 |
| United States 2-year bond (%) | 4.309 | 4.357 | -0.048 |
| United States 10-year bond (%) | 4.533 | 4.627 | -0.094 |
| United States 30-year bond (%) | 4.741 | 4.8321 | -0.091 |
* Implied yields from September 2025 futures. As at 13th Feb.
LOCAL MARKETS
Australia’s 10-year government bond yield increased1 basis point to 4.495%. The drivers on Australian rates currently have largely been driven by the US. The CPI print yesterday should be seen as a shot across the bows for the RBA. At a 90% expectation of a rate cut on 18 Feb, we believe the market is underestimating risks.
The yield on the 10-year US Treasury fell below 4.55% on Thursday, following President Trump’s announcement to consider reciprocal tariffs on foreign nations, as investors focused on trade policy uncertainty rather than hotter-than-expected inflation data.
The decline in yields signals demand for safer assets amid concerns over potential tariff-driven cost increases, which could further fuel inflation. Trump signed a measure directing the US Trade Representative and Commerce Secretary to propose new country-specific levies, a process that may take weeks or months. January producer prices exceeded expectations, with prior month values revised sharply higher.
The 10-year yield had climbed above 4.65% the previous day, its highest in three weeks, after inflation data raised concerns that the Fed might delay rate cuts. Headline inflation hit 3% in January, with core inflation at 3.3%, driven by price increases in shelter and transportation services.
