Summary:
Last week, the Australian government bond market saw modest yield rises, with the 10-year at 4.31% and the 30-year at 5.07%, reflecting caution amid global growth concerns. The AOFM conducted Treasury Bond and Note auctions totalling A$3.8 billion, as part of the 2025–26 issuance plan. Corporate bond activity remained strong, particularly ESG-focused issues, driven by superannuation and institutional demand. Market preference leaned toward floating-rate products, while regulatory and liquidity enhancements improved access. Investors remain watchful of upcoming inflation and employment data, with expectations that the RBA may cut rates further, sustaining fixed-income appeal.
Figure 1: Aust. 3 yr minus 10 yr Bond Spread
Figure 2: Australian & US Bond Yields
Figure 3: US 10-year minus 2-year Bond Spread
