Summary:
The Bank Bill Swap Rate (BBSW) market remained stable this week, reflecting a balanced response to the RBA’s decision to hold the cash rate at 3.85% and ongoing global economic signals. For the week ending July 18, 2025, the 1-month BBSW held at 3.77%, while the 3-month BBSW stayed at 3.71%, based on daily data trends. The 6-month BBSW rose slightly to 3.7637% from 3.8017%, indicating a modest steepening of the short-end yield curve amid tariff concerns and market anticipation of an August rate cut.
This stability, with the 1-year swap rate down 5.25 basis points to 3.3308%, aligns with a market pricing of an 85-basis point rate cut over the next year, targeting 3.02% by mid-2026, as noted in recent swap rate movements. The 5-year swap rate dipped 2.54 basis points to 3.7476%, reflecting cautious optimism. Investors are adopting a wait-and-see approach, with attention on the August 1 tariff deadline and next week’s economic releases
Bank Bill Swap Rates
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 month 3.77 0.185 0.0453 3 months 3.71 0.127 0.0106 6 months 3.7637 0.0093 -0.0848 SWAP RATES
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 year 3.3308 -0.0525 -0.0113 3 years 3.3245 -0.0492 0.0195 5 years 3.7476 -0.0254 0.0451 10 years 4.244 0.0068 0.089 15 years 4.4952 0.0139 0.1077
Exhibit 1: Australian 3Y/10Y Bond Yield
