Daily

27 March 2025

ClosePrevious CloseChange
Australian 3-year bond (%)3.8133.8060.007
Australian 10-year bond (%)4.514.4830.027
Australian 30-year bond (%)5.0645.050.014
United States 2-year bond (%)3.9984.021-4.021
United States 10-year bond (%)4.3694.354-4.354
United States 30-year bond (%)4.7294.703-4.703

LOCAL BOND MARKETS

Australia’s 10-year government bond yield rose to around 4.55%, hitting its highest level in over a month, even as inflation data pointed to easing price pressures. Australia’s headline inflation eased to 2.4% in February from 2.5% in the previous month, versus forecasts for no change. Core inflation also fell to 2.7% from 2.9%. The data comes less than a week before the Reserve Bank of Australia’s next policy decision on April 1, where the central bank is expected to keep rates unchanged.

Meanwhile, markets currently see a 68% chance of a rate cut in May. However, the central bank has warned earlier that further monetary easing is not guaranteed, following its first rate cut in over four years last month. In other news, the Australian government on Tuesday announced two additional personal income tax cuts set for 2026 and 2027, totaling A$17.1 billion over the forward estimates.

US BOND MARKETS

The yield on the US 10-year Treasury note trimmed early gains to hover around 4.37% on Thursday, remaining near its highest level in nearly a month. Investors weighed the escalating trade war, its economic implications, and newly released economic data.

The Trump administration announced a 25% tariff on “all cars not made in the US,” set to take effect on April 2, while Trump warned of imposing “far larger” tariffs on the EU and Canada if they coordinated efforts to counter US trade measures. Concerns are growing that these tariffs could hurt the US economy and drive inflation higher. On the data front, GDP growth for Q4 was revised slightly higher to 2.4% from 2.3% and core PCE prices also rose slightly less in Q4 (2.6% vs 2.7%). Also, initial claims came roughly in line with expectations and the levels of the previous weeks, but the goods deficit was higher than expected. The PCE report due tomorrow will be keenly watched for information on how price pressures are evolving.

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