Summary:
Short-Term Money Market Rates (BBSW)
Short-term BBSW rates rose across all tenors this week. The 1-month rate increased by 7 basis points to 3.54%, the 3-month rose 15 bps to 3.65%, and the 6-month jumped 23 bps to 3.89%. Over the month, the 1-month rate remained unchanged, while the 3-month and 6-month tenors rose 7 bps and 15 bps respectively. This reflects a steepening bias at the short end of the curve, suggesting rising expectations for funding costs over the next half-year, possibly driven by tightening liquidity or renewed inflationary concerns.
Bank Bill Swap Rates
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 month 3.54 0.07 0 3 months 3.65 0.15 0.07 6 months 3.89 0.23 0.15
Medium- to Long-Term Swap Rates
Swap rates climbed across all maturities during the week. The 1-year rate rose 18 bps to 3.53%, the 3-year increased 19 bps to 3.59%, and the 5-year gained 18 bps to 3.96%. Longer-term yields also moved higher, with the 10-year up 14 bps to 4.33%, and the 15-year rising 12 bps to 4.53%. Monthly changes were more moderate, with gains of 4–6 bps across the curve.
The broad-based rise reflects reduced expectations for near-term RBA cuts following hotter-than-expected inflation data. The relatively larger increase at the short end represents a bear flattening, indicating markets are reprising the timing of rate cuts rather than fundamentally reassessing long-term inflation or growth dynamics.
SWAP RATES
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 year 3.53 0.18 0.05 3 years 3.59 0.19 0.05 5 years 3.96 0.18 0.06 10 years 4.33 0.14 0.04 15 years 4.53 0.12 0.04 - Exhibit 1: Australian 3Y/10Y Bond Yield
