18 August – 22 August 2025

Summary:

The Bank Bill Swap Rate (BBSW) market moves reflected the RBA’s decision to cut the cash rate by 0.25% to 3.6% on the back of improving inflation picture and weakening GDP growth prospects.

For the week ending 22^nd August 2025, the 1-month BBSW held at 3.55% (down 1 bp), while the 3-month BBSW closed at 3.57% (down 4bps), based on daily data trends. The 6-month BBSW dropped 7 basis points to 3.66%, reflecting a an easing short-end yield curve amid RBA rate cut by 0.25% and possibly further accommodative RBA stance in the coming months.

The longer end of the swap rate curve steepened during the week with the 1-year swap rate down 5 basis points to 3.29%.  The 3-year swap rate dropped 4 basis points to end the week at 3.26%.  The 5-year swap rate dropped 4 basis points to 3.66%, reflecting investor expectations of revised cash rate path for Australia following RBA’s highly anticipated rate cut amid slowing domestic growth and uncertainties around US tariffs.

• Bank Bill Swap Rates

  TERM TO MATURITY	CLOSING RATE	Δ WEEK	Δ MONTH
  1 month	3.5575	-0.0049	-0.185
  3 months	3.5716	-0.0404	-0.1101
  6 months	3.66	-0.0681	-0.0622

• SWAP RATES

  TERM TO MATURITY	CLOSING RATE	Δ WEEK	Δ MONTH
  1 year	3.3137	0.0177	-0.0295
  3 years	3.3208	0.052	0.0158
  5 years	3.7332	0.0654	0.0132
  10 years	4.2105	0.0807	0.009
  15 years	4.4605	0.078	0.0092

Exhibit 1: Australian 3Y/10Y Bond Yield